Global rice trade set to fall 7 pct in 2008

Enlarge Photo Women smell samples of rice at a wholesaler's shop in south Tehran June 18, 2008....

Wed, Jun 25 07:05 PM

By Naveen Thukral

LONDON (Reuters) - Global trade in rice is expected to decline 7 percent this year because of curbs imposed by exporters, but shipments could rebound next year on better supplies, the International Grains Council said on Wednesday.

Rice prices, which have come off highs in recent weeks, could ease further as leading importers of the grain such as the Philippines and Indonesia are covered for the rest of 2008, IGC Senior Economist Darren Cooper said.

"On the basis of better availabilities and assuming some further easing of restrictions on trade, we would see some improvement in the global trade next year," he told Reuters in an interview.

Cooper said world rice sales were likely to slip to 28.5 million tonnes this year from 30.6 million tonnes in 2007.

"There is about 2 million tonnes of drop and that is mostly due to restrictions on India's rice exports. Also, Vietnam had set a limit on exports."

Asian rice prices almost trebled to their highest ever this year as export restrictions by leading suppliers fuelled insecurity over food supplies.

With signs of big harvests and export curbs being lifted, benchmark Thai prices have fallen from their peaks.

PRICES FALL

On Wednesday, the price of Thai 100 percent B grade white rice, the world's benchmark, fell 3 percent from the previous week due to thin demand, exporters said.

The median price quoted by Bangkok traders was $770 per tonne, down from last week's $795 per tonne, and nearly 30 percent lower than a record high of $1,080 per tonne on April 24.

"Certainly we expect improvements in the coming months assuming that there are no fresh worries on the production side. And indications are that global stocks could improve this year," Cooper said.

The Philippines, the world's biggest rice importer, is unlikely to buy additional quantities this year, he said.

"We think the Philippines will not return to the market for any significant quantities in the rest of the year. They seem to be well covered for now," the official said.

The IGC estimated Philippines' rice imports this year would rise 25 percent to 2.5 million from 2 million tonnes in 2007.

But Indonesia's rice imports were likely to be just half the 1.6 million tonnes bought in 2007:

"They needed to replenish emergency stocks last year, so that was the reason for the higher imports," said Cooper. "In fact we haven't seen major purchases from them, although it is quite early."

Similarly, imports by Bangladesh were also expected to fall to 1.1 million tonnes from 1.4 million tonnes last year.

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