Global rice prices likely to face continued downward pressure in coming months as world output surpasses demand for eighth consecutive year, FAO says; global production forecast to rise 1.7% year-over-year to 732.3 million tonnes

LOS ANGELES , May 4, 2012 () – Global rice prices are likely to face continuing downward pressure during the coming months as the global rice output surpasses demand for the eighth consecutive year, the United Nation’s Food & Agriculture Organization said, Bloomberg reported May 4.

Worldwide paddy production in 2012 will most likely rise 1.7% year-over-year to 732.3 million tonnes, which is equivalent to 488.2 million tonnes of milled rice, the FAO said in an emailed statement.

FAO added that this would exceed consumption, raise the stock-to-use ratio to a record high, and increase global inventories.

Rice production is expected to rise in China, Pakistan, India, Bangladesh, Thailand, Myanmar, and the Philippines, FAO said.

Decreased rice prices for half the globe could potentially lengthen a worldwide decline in food costs. Driven by lower costs for sugar, grain and dairy, global food costs fell in April—the first time that they have fallen this year, according to a 55-food-item-index tracked by the FAO.

Year end stockpiles in 2012 could potentially rise 8.4% year-over-year to 152.8 million tonnes, with the reserve replenishment supply mainly concentrated in Indonesia, China, Thailand and India, the FAO added.

A rice purchasing program in Thailand could potentially raise its 2012 year-end milled rice stocks 19% to 7.4 million tonnes. In 2013, global rice inventories could rise to 164 million tonnes, according to the FAO.

The primary source of this article is Bloomberg, New York, New York, on May 4, 2012.

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