The world is heading for a record rice crop, according to the U.S. Department of Agriculture (USDA), which projected 2011-12 production at a 458.38 million tonnes in its September World Agricultural Supply and Demand Estimates report. The figure is 2.13 million tonnes more than the forecast produced a month earlier and compared with a production estimate of 451.19 million tonnes for 2010-11.

The rise is “primarily due to larger than expected crops in Brazil, China, the Philippines and the United States,” the report said. It raised its estimate for China by 1 million tonnes to 139 million, “due mainly to an increase in the early rice crop.” The previous year’s figure for China’s crop is 137 million tonnes.

The International Grains Council (IGC), in its September report, raised its estimate for world rice production (milled basis) in 2011-12 by 3 million tonnes to a record 461 million, compared with 451 million the year before, “due to increased forecasts for several leading Asian producers, notably India, where prospects for this year’s main (kharif) outturn appear excellent.”

“Larger supplies will boost consumption in Asian countries, especially in China and India, likely resulting in a 10-million-tonne increase in global use to a record 458 million,” it said. “With production set to exceed consumption for the seventh consecutive year, the 2011-12 carryover is projected to rise to a nine-year high of 101.2 million tonnes.

In the USDA report, Brazil’s projected 2011-12 crop was raised to 8.84 million tonnes from the previous estimate of 7.9 million because of an increase in planted area.

“The recent surge in global prices accounts for the increase in planted area in Brazil from last month’s forecast,” the USDA said. Its estimate for the previous year’s crop in Brazil is 9.26 million tonnes.

It forecasts U.S. rice production in 2011-12 at 6.13 million tonnes, up by 90,000, due entirely to an increase in yield. The previous year’s U.S. crop was 7.59 million tonnes. U.S. exports for 2011-12 are now put at 2.99 million tonnes, down from an earlier estimate of 3.11 million and down against the 2010-11 estimate of 3.49 million tonnes.

“This crop is much smaller and prices are higher, both of which are factors which may hold exports back this year,” the U.S. Rice Producers Association’s Rice Advocate publication commented. “It has to also be recognized that the Mercosur countries have a lot of rice that needs to be exported and that Brazil is heavily subsidizing its exports in order to get its rice moved. Someone in Washington (D.C.) needs to take up the subsidy matter with the Brazilians.”

The decrease in the export projection is due mostly to a much tighter supply situation but additionally to an expected increase in competition from South American exporters in Western Hemisphere long-grain markets, the WASDE report said. “Long-grain exports to Iraq are also expected to be lower,” it said. “Increased competition, principally from Egypt, is expected to reduce medium-grain exports to Libya.”

The USDA’s forecast for production in the Philippines was raised by 100,000 tonnes to 10.9 million tonnes, which, as the Economic Research Service pointed out in its Rice Outlook report, is a record. “The production increase is driven by a higher planted area, forecast at a record 4.635 million hectares,” it said. “The area forecast was raised this month based on the July-December 2011 area estimate from the country’s Bureau of Agricultural Statistics and expectations regarding plantings the remainder of the marketing year.”

The USDA’s estimate for Philippine rice production in 2010-11 is 10.54 million tonnes.

For Vietnam, the 2010-11 production estimate was raised 95,000 tonnes to a record 25.9 million tonnes based on information from the U.S. Agricultural Officer in Ho Chi Minh City.

The USDA also noted higher prices. It put the U.S. 2010-11 all rice season-average farm price at $14 to $15 per cwt ($309 to $331 per tonne), up 80¢ per cwt ($18 per tonne) on each end of the range from last month compared to a revised $12.70 per cwt ($280 per tonne) for 2010-11.

“The increase in prices is due to both expected tighter domestic supplies, for long-grain, and higher global prices as a result of government policies in Thailand aimed at supporting domestic rice prices,” it said.