FAO estimates bumper rice output

Bumper rice production during 2008 harvesting season may help ease global consumer prices, Food and Agriculture Organisation (FAO) of the United Nation said in its February Rice Market Monitor.

The agency has estimated better-than-expected global rice production at 683 million tonnes during the 2008 harvesting season, a rise of 3.5 per cent from 660 million tonnes in the previous year. This is the fastest rate of growth the agency has recorded in the last three years. The global rice harvesting season continues till May every year.

Higher rice output will offer a breather for major rice consuming countries, mainly Asian, who were struggling to meet the regions requirement because of skyrocketing prices. Leaders of this region were worried over expanding starvation in case price rise continues for long. Global rice prices for 2008 ended the year on average 80 per cent higher than in 2007 despite the steady decline since their peak levels in May. The price of the benchmark Thai white 100 percent second grade was $611 a tonne in January 2009 as compared to $385 a tonne in the same month of previous year after hitting the peak of $963 a tonne.

Rapid increase in the price of rice - the staple food for around two and a half billion people - and other cereals played a major role in the food price shocks last year, characterised by high fuel and fertiliser prices that triggered political unrest in many countries.

“One positive effect of the high rice prices in 2008 was that farmers and governments took up the challenges and opportunities and planted more, boosting production despite high fuel and fertilizer costs and a scarcity of quality seed,” said FAO Senior Economist Concepcion Calpe.

Total area under rice cultivation is estimated to increase by 2.2 per cent globally as farmers and governments reacted to the high prices. Favourable weather in many parts of the world also helped to sustain yields in the face of high fuel and fertiliser prices.

Looking at the higher prices farmers and governments reacted sharply by the former dedicating more area under this staple food while the latter took stern actions to keep price under check. Much of the global production gain for the 2008 paddy season is expected to be concentrated in Asia, with bumper harvests expected in both large and small producing countries, a FAO release said.