Rice production is up in 2010-11 and expected to rise to a record level the following year, despite a predicted fall in U.S. output. Demand for rice from the Middle East and Asia remains strong.

The International Grains Council (IGC) now puts world rice production in 2010-11 at 450 million tonnes, up 10 million from the year before. It has consumption at 448 million tonnes, allowing a 3-million-tonne increase in stocks to 97 million tonnes, an eight-year peak. The IGC had the previous year’s rice production at 440 million tonnes, with consumption at 437 million.

“After last year’s solid rise, world trade is forecast to decrease by 2 percent to 30.3 million tonnes, reflecting a likely steep fall in imports by the Philippines,” the IGC said.

“The rise in output reflects a rebound in India’s main crop as well as increases elsewhere in Asia, including China, Bangladesh and Indonesia. Brazil’s much-improved outturn will result in an increase in South America’s output, to 16.3 million tonnes (from 14.9 million a year ago), while production in sub-Saharan Africa is estimated to expand by 4%, to an all-time high of 11.8 million tonnes.”

The IGC predicted a sharp fall in U.S. output for 2011-12. The most recent USDA Crop Progress Report puts rice plantings below the five-year average by 14 percentage points for the six rice-growing states, according to the USA Rice Federation’s USA Rice Daily.

In a Rice Outlook report dated May 12, the USDA’s Economic Research Service predicted U.S. rice production at 211 million cwt, or 9.6 million tonnes, down 13% in its first forecast for 2011-12.

“The smaller crop is the result of a 17 percent decline in planted area,” the ERS said. “The area decline is largely the result of better returns for alternative crops such as soybeans, corn, and cotton at planting and expectations of very large stocks of rice at the start of the 2011-12 market year.”

Global rice production in 2011-12 is forecast at a record 457.9 million tonnes, up 1% from 2010-11. “The record crop is due to expanded plantings,” the ERS said. “Of the top 10 rice-producing countries (China, India, Indonesia, Bangladesh, Vietnam, Thailand, Burma, the Philippines, Brazil, and Japan), all except Brazil and Japan are expected to harvest larger crops in 2011-12, with record production projected for Bangladesh, Burma, Cambodia, Laos, Sri Lanka, Thailand and Vietnam.”

According to the IGC, “Asian white and parboiled rice markets were weighed by improved supplies from main and second-crop harvests in key exporters during April. After reaching six-week highs in late March, nearby U.S. rough rice futures were pressured by profit taking and generally slow export demand.”

It also noted a marginal decline in broken rice markets in Vietnam.

“Despite pressure from improved main (winter-spring) crop availabilities, f.o.b. offers were supported by recent strong international demand, notably from Cuba, Bangladesh and Indonesia,” it said. “Although the Philippines — typically its largest buyer — has secured relatively small quantities from the world market compared to recent years, Vietnam’s exports were stronger than anticipated during the first quarter, up by 42% year-on-year, to 1.9 million tonnes. Consequently, the official 2011 export forecast was raised to a record of at least 7.1 million tonnes (6.6 million last year).

Higher regional supplies had weighed on white and parboiled values in Thailand. “However, official data confirmed a strong pace of exports in 2011. As of March 31, cumulative shipments amounted to 3 million tonnes, an increase of 41% compared with last year,” it said. The website of the Thai Rice Exporters Association carried a story quoting its vice-president, Sermsak Kuonsongtumas, saying that prices could peak at $550 a tonne in the third quarter.