Time to build up a sufficient food reserve
Thursday, 17 September 2009
There was a bumper rice production in the world in 2008 and the United Nations' Food and Agriculture Organisation (FAO) in its first two Crop Prospects and Food Situation reports for 2009, made in April and July, forecast an increase in world rice production this year. In its first forecast, the FAO projected world rice production this year at 692 million tonnes which would be 0.7 per cent above the 2008's record production of 687 million tonnes. In its second forecast, the FOA revised its estimate downwards at 689 million tonnes, still fractionally above the 2008 level. This was really a rosy picture.
The FAO, however, added a caveat in its April review and observed that the forecast was "very preliminary" and indicated that much would depend on the situation that would obtain at the time of planting paddy. That is, the weather conditions at the time of plantation, around April/May, will be the main determining factor. The FAO sounded optimist even as late as July and in its second review welcomed "a generally favourable start to the season." But the weather seems to have cheated the FAO -- and the rice growers. The monsoon rains duly arrived by the end of June but not in all the rice-growing areas of the world. Drought has hit many rice-growing countries including India, China, Indonesia, Australia, Iraq and Cambodia. As a result, the robust optimism expressed earlier in the year regarding a big world production of rice in a consecutive second year has been replaced by worries about poor harvest. The US Department of Agriculture estimates that world supply of rice this year will be 433.5 million tonnes and consumption 438.1 million tonnes.
The outlook of the 2009 rice production is particularly bad for India. About 250 districts, covering nearly half of the country, have been affected by drought and paddy was sown in 24.7 million hectares as of August, compared with 30.4 million hectares. In this Kharif season, India may produce 60 million tonnes compared to 84.58 tonnes in the last Kharif season. The Indian agriculture minister, Sharad Pawar, estimates rice production in India will fall by 10 million tonnes. This shortfall in rice production may not create a food crisis in India as the country has, according to the Indian agriculture minister, "enough food reserves to meet any shortfall for 13 months".
But as India is the second among the leading four rice-exporting countries in the world, the bad prospects of rice production in India have created fears of price rise in the world rice market. India has already stopped export of rice. When India and Vietnam put restrictions on rice export early in 2008, the price of rice in the world market reached a record high at $1,000 per ton. The prices came down as there was a bumper production of rice in the world as a whole. Nevertheless, the benchmark price still remains at $550 dollar, double the level in 2007.
The position of Bangladesh is fourth among the top 32 importers of rice in the world. This country experienced a bumper boro harvest in 2008 and the total production of rice in the year was about 32.4 million tonnes while the average annual requirement is about 30 million tonnes. This saved the country from an apprehended food crisis in the aftermath of Ailya in 2008 and prices of rice came down to a tolerable level. But there is hardly any scope to feel complacent. A drought-like situation early in the Kharif season affected planting of aman. What impact it may have in the total production of aman is not yet known. The government should build up sufficient food reserves well in time, keeping in view the global rice production outlook and possible volatility in the prices of rice in the world market.
The FAO, however, added a caveat in its April review and observed that the forecast was "very preliminary" and indicated that much would depend on the situation that would obtain at the time of planting paddy. That is, the weather conditions at the time of plantation, around April/May, will be the main determining factor. The FAO sounded optimist even as late as July and in its second review welcomed "a generally favourable start to the season." But the weather seems to have cheated the FAO -- and the rice growers. The monsoon rains duly arrived by the end of June but not in all the rice-growing areas of the world. Drought has hit many rice-growing countries including India, China, Indonesia, Australia, Iraq and Cambodia. As a result, the robust optimism expressed earlier in the year regarding a big world production of rice in a consecutive second year has been replaced by worries about poor harvest. The US Department of Agriculture estimates that world supply of rice this year will be 433.5 million tonnes and consumption 438.1 million tonnes.
The outlook of the 2009 rice production is particularly bad for India. About 250 districts, covering nearly half of the country, have been affected by drought and paddy was sown in 24.7 million hectares as of August, compared with 30.4 million hectares. In this Kharif season, India may produce 60 million tonnes compared to 84.58 tonnes in the last Kharif season. The Indian agriculture minister, Sharad Pawar, estimates rice production in India will fall by 10 million tonnes. This shortfall in rice production may not create a food crisis in India as the country has, according to the Indian agriculture minister, "enough food reserves to meet any shortfall for 13 months".
But as India is the second among the leading four rice-exporting countries in the world, the bad prospects of rice production in India have created fears of price rise in the world rice market. India has already stopped export of rice. When India and Vietnam put restrictions on rice export early in 2008, the price of rice in the world market reached a record high at $1,000 per ton. The prices came down as there was a bumper production of rice in the world as a whole. Nevertheless, the benchmark price still remains at $550 dollar, double the level in 2007.
The position of Bangladesh is fourth among the top 32 importers of rice in the world. This country experienced a bumper boro harvest in 2008 and the total production of rice in the year was about 32.4 million tonnes while the average annual requirement is about 30 million tonnes. This saved the country from an apprehended food crisis in the aftermath of Ailya in 2008 and prices of rice came down to a tolerable level. But there is hardly any scope to feel complacent. A drought-like situation early in the Kharif season affected planting of aman. What impact it may have in the total production of aman is not yet known. The government should build up sufficient food reserves well in time, keeping in view the global rice production outlook and possible volatility in the prices of rice in the world market.