Despite a likely rise in output and a predicted increase in ending stocks, rice prices remain firm, bolstered by tight supplies and the strength of wider commodity markets.

In its report of Jan. 20, the International Grains Council (IGC) forecast total world rice production for 2010-11 at 452 million tonnes, up from a forecast of 449 million tonnes published on Nov. 25. Its figure for the 2009-10 crop is 440 million tonnes.

The increased crop reflected a raised official figure for China, the IGC said. It raised China’s 2010 rice crop to 139.2 million tonnes from its previous forecast of 135.7 million. China’s 2009 rice crop is put at 136.6 million tonnes.

“While global consumption is increased from before, ending stocks are raised to an eight-year peak of 98.2 million tonnes,” it said. “At 30.6 million tonnes, the forecast of world trade in calendar 2011 is reduced slightly, mostly reflecting a smaller projection of shipments to the Philippines. However, the total will still be 2 percent higher than in the previous year.”

It noted an increase in rice export prices, along with other grains, in the period leading up to the publication of the report. “But while Thai values in late-December climbed to a ten-month peak, they subsequently fell back as the main crop harvest advanced,” it said.

The U.S. Department of Agriculture’s (USDA) Economic Research Service, in a Rice Outlook report dated Jan. 13, also noted recent declines. “Trading prices for Thailand’s high- and mediumquality grades of non-specialty rice have decreased from 3 to 6 percent from the first week of December,” it said. “The release of government-held intervention stocks, as well as a weaker Thai baht, was behind the decline in quoted prices.”

“The government has released 4 to 5 million tonnes (out of total intervention stocks of 5 to 6 million tonnes) since July 2010,” the USDA’s attaché noted in a report on the Thai rice market. “The remainder of the approximately 1 million tonnes will be kept as safety stocks for food security purposes.”

Meanwhile, foreign buyers made few enquiries for Thai white rice as they expect bumper new-crop supplies of Vietnamese rice in the upcoming second-crop harvest due in a couple of months, it said.

In its Rice Advocate publication, the U.S. Rice Producers Association took a positive view of prices. “With harvest in Vietnam just a few weeks away, Asian prices look comfortably firm – more so than in years past,” it said.

The Economic Research Service noted a drop in prices elsewhere. “Vietnam’s price quotes have softened slightly in recent weeks as well,” it said. “Price quotes for U.S. long-grain milled rice have fallen slightly over the past month, with large domestic supplies reducing some of the effects of historically low milling rates.”

For Indonesia, the IGC predicts a recovery in production to 38.5 million tonnes in 2010 after the 2009 drop to 37.5 million from 38.3 million the year before. But the USDA’s office there has raised doubts. It estimated that Indonesian 2009-10 rice production declined to 36.4 million tonnes compared to the previous 2008-09 crop of 38.3 million tonnes of milled rice equivalent.

“It was learned during a recent field trip to West Java that most farmers in the area started the first planting season of MY 2010-11 in mid-November 2010,” it said. “Some pest problems continue to occur.”

Indonesia’s first main harvest is expected to take place in late February to March 2011 and will contribute an estimated 55% to 60% of annual rice production.