For the first time in last six years, global rice production is expected to sharply decline this year. According to Jawed Ali Ghori, former Chairman Rice Exporters Association of Pakistan (Reap), the main reason is the drought and heat wave that has been linked with the El Nino weather pattern.
“The top four rice producing countries, accounting for 60 percent of global production including India, Thailand, Vietnam and Pakistan, are all expected to see a 30 percent drop in their inventories,” he added.
Thailand is now in its second year of drought and its production is expected to fall by 20 percent, he informed. While, China, the world’s largest rice importer is once again expected to import around 5 million tons of rice as its own consumption will outpace production for a third year in a row, Ghori added.
“The United States Department of Agriculture in its monthly agriculture update has slashed its estimate for world ending stocks to 18 percent for the 2015-16 rice season. This means that there are now 65 days of supply or rice in reserve as compared to 80 days last year,” he said.
With expectation of shortfall in production, world prices have already started to reflect this supply strain and are already up 13 percent since September, he said and added that the market is not panic levels seen in 2008, when a similar El Nino pattern caused India to ban exports causing global prices to increase by more than 300 percent.
In addition, scenes of riots were witnessed in Haiti while supermarkets in Philippines got cleaned out of rice in two days.
“New rice crops are expected to be harvested during November to December. However any adverse weather change, especially the threat of drought can affect the size of the final crop,” he said.
Exporters are closely monitoring rice sowing for price direction as farmers are switching from rice to other less water intensive crops due to lack of water availability,” Ghori said.
Source: Business Recorder