Rice output may not be enough: IRRI

The global rice harvest will likely be just enough to meet demand, leaving little cushion for any losses from drought in China or potential monsoon problems in India, the International Rice Research Institute said.

Rice output may be 450 million to 460 million tonne in the 2011-2012 season, with demand forecast at 450 million tonne, said Robert Zeigler, director-general at the Los Banos, Philippines-based institute. The output forecast doesn’t account for the impact of drought in China, he said.“We’re not seeing a surplus, and that’s a little bit of a problem,” Zeigler said in an interview.“The near-term unknown is the impact of the drought in China on production. The other big unknown is the Indian monsoon.”

Potential output losses in China, the world’s largest grower and consumer, and abnormal monsoon rains in India, the second-largest, could tilt the market into a deficit, driving Chicago-traded futures higher.

Zeigler’s forecast compares with the May 11 outlook of the US Department of Agriculture, which estimated the global harvest at 457.858 million tonne in the 2011-2012 season, trailing demand estimated at 458.73 million tonne.The July-delivery rough-rice contract gained 1.1% to $15.05 per 100 pounds on the Chicago board of trade at 1:31 pm Singapore time, taking this week’s advance to 7.6%. Futures gained 26% in the past year, trailing corn’s 109% jump and wheat’s 72% advance.

The rice-growing region in central China will likely remain dry over the seven-day period started yesterday, Telvent said in a May 18 forecast. Growing areas need more rain in the coming weeks, it said.

Areas of central China surrounding Wuhan city are experiencing the worst drought in 50 years, affecting half of all crops and causing estimated economic losses of more than 300 million yuan ($46 million), the China News Service reported yesterday, citing the municipality’s water department.Rainfall in Wuhan was as much as 70% lower this year, compared with a year earlier, the report said. The drought has affected 1.5 million crops including rice, wheat, corn, rapeseed and cotton, according to the report.

Source: http://www.financialexpress.com/news/rice-output-may-not-be-enough-irri/793309/0