Ample world rice supplies to cushion impact of Pakistan, China crop losses
Bangladesh buys more rice to fill domestic shortfall
- Heat, floods damage in key parts of China, Pakistan.
- Pakistan could lose a tenth of rice output to floods.
- Bangladesh buys more rice to fill domestic shortfall.
Abundantricesuppliesin key exporters may largely offset an expected drop in output after floods in Pakistan and asevere heatwave inChinadamagedcrops, capping any gains in prices from steady Asian demand.
Pakistan, theworld's fourth-largestriceexporter, suffered extensive damage to agriculture, includingrice, as floods ravaged large swathes of its farmland, while extremely high temperatures in parts ofChinaat the end of August have taken a toll onriceoutput in theworld's biggest importer of the staple.
However, globalricestockpiles are pretty comfortable and an improving Indiancropoutlook should quell any supply concerns and limit any priceincreases from recent strong demand that has emerged from Bangladesh, said a Singapore-based trader at one of theworld's topricetrading companies.
Pakistanis forecast to have lost around 10% of its 2022 estimatedriceproduction of around 8.7 million tonnes, whileChinahas suffered some damage, although the extent ofcroplossesis not clear, traders said.
Food prices have soared in markets acrossPakistanas devastating rains ruincrops and disruptsupplies, an early sign of how the worst floods in decades are creating food shortages at a time of financial crisis.
"Pakistan'sriceoutput has been really good over recent seasons," Peter Clubb, a market analyst at the International Grains Council, said. "While any large production loss is obviously bad, that improvement in production over recent seasons gives a bit of leeway."
China's Agriculture Minister Tang Renjian expressed concern that high temperatures and drought have hitriceproduction in the eastern provinces of Jiangsu and Anhui.
"It is too early to say exactly how poor yields (inChina) may be," Clubb said. "A general point, stocks inChinaare still veryample."
Monsoon boosts Indian crop prospects
Monsoon rains, which were delayed in parts of India's northern and easternrice-producing regions, have improved over the last couple of weeks, boostingcropprospects in theworld's largestricesupplier, traders said.
India had earlier been examining a need to restrict exports of 100% broken rice,mainly used for feed purposes.
But an improvement in rainfall over Indian rice-growingareas has ended any discussion of government restrictions on exports, said a second trader in Singapore who sells Indianriceto buyers in Asia and Africa.
The United Nations Food and Agriculture Organization'sworldpriceindex fell for a fifth month in August, after hitting a record in March after Russia invaded Ukraine, as a resumption of grain exports from Ukrainian ports contributed to improved supply prospects.
However, strong demand from Bangladesh has underpinnedriceprices in recent weeks.
Bangladesh plans to import around 1.2 million tonnes ofriceover the next few months to shore up reserves and cool high domestic prices.
A senior Bangladeshi food ministry official said the country is buying 530,000 tonnes ofricefrom India, Vietnam and Myanmar under government-to-government deals and is in talks with major producers in India, Vietnam and Thailand.
Indianriceprices last week climbed to their highest in more than a year at around $383 per tonne
Thailand and Vietnam, theworld's second-and third-largestriceexporters respectively, have agreed to cooperate on raising prices, a move aimed at increasing leverage in the global market and boosting farmers' incomes.