Rice Production Grows, but Not Everywhere

A United Nations report predicts that world rice production will be higher this year thanlast year. The report is from the Food and Agriculture Organization. The FAO says the global rice harvest should be almost two percent higher this year, mainly because ofincreased production in Asia. Large gains are expected in Bangladesh, Burma, China, India, Pakistan, the Philippines and Thailand.

Also, the FAO predicts a recovery for rice harvests in Africa. Production increases are expected to be led by Mali, Nigeria and Senegal. In other parts of the world, the report predicts that rice harvests will be lower in the European Union and the United States. Two reasons for this are unusually dry weather and falling rice prices, which have led some farmers to plant other crops. Smaller rice harvests also are expected in Latin America and the Caribbean. Concepcion Calpe is an economist with the FAO. She says good harvests in Asia will lead to reduced demand in the global rice trade this year. 

Demand in global trade is expected to fall nine hundred thousand tons to about thirty-four million metric tons. Ms. Calpe says one reason is because a lot of the major importers, like Indonesia or the Philippines, or even Bangladesh, have harvested very good crops. Another reason is because some of them, like the Philippines, have set limits on how much they are willing to import. The FAO says prices for rice have stayed high for several reasons. These include higher costs for fuel, fertilizer and, in some areas, labor. One country where prices remain high is China. Concepcion Calpe says the high prices raise questions about official Chinese reports of record harvests.

In Thailand, a government price-support program has led rice exports to fall by twenty percent, to less than eight million tons. The program keeps prices for Thai rice exports above market prices. As a result, the FAO says exporters like Australia, India and Vietnam have captured a larger market share.

Ms. Calpe notes that Burma could become a major exporter of rice. Many Western governments have eased trade restrictions on Burma recently because of its efforts at political and economic reform. Foreign investment and increased productivity in Cambodia might also help that country export more rice.