Aug 30 (Reuters) – Global rice prices are expected to remain steady over coming years, and ASEAN rice producers will play a key role in the stability of the market and meeting growing demand, the Asian Development Bank (ADB) said in a report released Thursday.
According to ADB data, total rice output in ASEAN countries is projected to grow 1.37 percent annually from nearly 110.5 million tonnes in 2010/11 to 128.3 million tonnes in 2021/22. The estimate is based on normal weather conditions and the same macro conditions.
“So far, the rice market appears to be holding steady and current production estimates suggest that overall prices will remain stable,” the ADB said, adding that rising output in ASEAN countries would help stabilise prices.
However, price shocks could still be a risk if, as in 2007/08, India resorts to an export ban because of poor monsoon rains.
Rice prices surged to a record high in 2007/08, when India banned exports for reasons of food security, triggering a supply shock and panic buying that pushed the benchmark Thai 100 percent B grade white rice to $1,080 per tonne in April 2008.
As of Aug.1, India had stocks in government warehouses of 28.5 million tonnes, compared with a target of 9.8 million tonnes for the quarter ending September, thanks to bumper harvests in subsequent years.
The benchmark 100 percent B grade Thai white rice RI-THWHB-P1 was offered at $600 per tonne on Thursday, up from last week’s $590.
AMPLE ASEAN SUPPLY
With nearly 47 million hectares of rice fields, ASEAN accounts for 29 percent of global harvested rice area.
Among the 10 ASEAN nations, the ADB said Cambodia, Laos and Myanmar had good production potential, given the availability of land and water resources.
“But they require investment in transportation and market infrastructure, research and development for producing more,” the report said. “From a food security perspective, in the near term, the ASEAN region has ample rice supplies with increasing both production and ending stocks in 2012.”
That includes record rice stocks in Thailand, where a government rice intervention policy to pay farmers higher-than-market prices has funnelled a huge quantity of supply into government warehouses.
The intervention programme has pushed Thai prices to uncompetitively high levels, causing rice exports to fall 46 percent so far this year to 4.3 million tonnes and putting Thailand at risk of falling back from its No.1 exporter ranking for the first time since 1983.
However, ADB said Thailand could regain market share, even with the paddy pledging programme, through government-to-government sales. (Reporting by Apornrath Phoonphongphiphat; Editing by Chris Lewis)
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