Rice
stockpiles are poised to reach the biggest in almost a decade as record
harvests boost supplies and imports decline for the first time in three years.
Inventories
may gain 3 percent to 100.1 million metric tons, the
most since 2003, as global imports contract 7.5 percent,
the U.S. Department of Agriculture says. The Thai export price, a global
benchmark, may tumble as much as 11 percent to $500 a
ton in the first half, the lowest since June last year.
Rice
slumped 15 percent from a three-year high in November
as India, the second-biggest grower, lifted a three-year ban on exports of
non-basmati grain and Thailand, the largest shipper, bought less than expected
in the first four months of a government stockpiling program. That’s boosted
supplies of the staple for half the world at a time when farmers are planting
record wheat and corn crops. Global food costs fell 10 percent
from a record in February 2011, according to the United Nations.
“Indian
exports created havoc in the earlier supply-and-demand calculations,” said Jac Luyendijk, the chief
executive officer at Preverenges, Switzerland-based
SAT Swiss Agri Trading SA, who has worked in the rice
industry for about two decades, including stints at Andre & Cie. and Nidera.
Production
will advance 2.6 percent to 462.75 million tons this
year as imports worldwide drop to 30.12 million tons, the USDA estimates. India
may ship 6.5 million tons, the most since at least 1960, as the harvest climbs
6.3 percent to a record 102 million tons, the data
show. Farmers in biggest grower China will boost output 2.6 percent
to a record 140.5 million tons.
The
expansion is contributing to record supplies of cereals this year as farmers
respond to prices that more than doubled since 2005, according to the UN’s Food
& Agriculture Organization in Rome. Inflation worldwide may slow to 2.6 percent this year from 3.6 percent
in 2011.
Any
change from normal weather patterns in India may spur the government to ban
exports once more, said Concepcion Calpe, a senior FAO economist and secretary
of the organization’s intergovernmental group on rice.
Farmers
in the U.S., the fifth-largest exporter, may switch fields to more profitable
crops, the Houston-based U.S. Rice Producers Association said in a Jan. 13
report. Domestic stockpiles are set to drop to a two-year low before the next
harvest after acreage fell to the smallest in more than two decades, the USDA
estimates.
Stockpiles
in the five biggest exporting nations will reach a record 31.9 million tons in
2011-2012, the London-based International Grains Council estimates.
The
Philippines, formerly the world’s biggest buyer, will cut imports to 500,000
tons this year and to 100,000 tons in 2013 from 2.6 million tons in 2008-2009
when prices rallied to a record as some countries curbed shipments, according
to forecasts from the agriculture ministry.
Exports
from Myanmar may more than double to 1.5 million tons this year as planting
expands, and increase to 3 million tons by 2015, the Myanmar Rice Industry
Association said last month. The gain would make the country the sixth-largest
shipper, with volumes at the highest level since the 1960s, when it was the
biggest exporter.
Shipments
from Vietnam, which totaled 7.1 million tons in 2011,
may be as much as 7.34 million tons this year, according an agriculture
ministry report on its website Feb. 3.