Thread: Rice crop to hit record, but prices still rising

World rice output is expected to hit a record high this year, but growing demand and export curbs should keep prices high, at least in the short term, the UnitedNations’ Food and Agriculture Organisation said on Monday.

Rice prices have been surging as governments and importers rush to stock up, spurred by growing fears the food staple will be in short supply

“World paddy production in 2008 could grow by about 2.3%, reaching a new record level of 666 million tonne, according to our preliminary forecasts,” FAO rice expert Concepcion Calpe said in a statement on Monday.

Taken in milled terms, this year’s rice output should rise to about 445 million tonne, above FAO’s previous estimate of 441 million tonne and the 432 million tonne forecast by the US Agriculture Department on Friday. “For the first time, paddy production in Asia may surpass the 600 million tonne benchmark this year, amounting to 605 million tonne,” Calpe said, adding that major gains were expected all across the region.

In Africa, rice output is forecast to grow 3.6% to 23.2 million tonne in 2008, assuming normal rains in the coming months, while paddy output in Latin America and the Caribbean is seen rising 7.4% to 26.2 million tonne, the FAO said. The output forecast is negative for Australia, the United States and Europe, due to competition from other crops, the Rome-based agency said. The current forecast may worsen due to the cyclone which hit Myanmar when paddy farmers were harvesting their dry season crop accounting for 20% of annual production, Calpe said.

Rice prices rallied about 76% between December 2007 and April 2008, according to the FAO Rice Price Index, and they were expected to remain at relatively high levels because stocks held by exporters were expected to be reduced.

“Prices are expected to remain extremely firm, at least until the third quarter of 2008, unless restrictions on exports are eased in the coming months,” Calpe said.

In Singapore Per KG rice is 100Rs....