Rice is breaking records in global production and consumption. Although demand is covered, causing a rise in ending stocks, there have been enough bullish factors in the market to keep prices mostly firm.

“Rice export markets in Asia strengthened in March, with values supported by logistical issues in India, unexpectedly heavy buying by China and ongoing support measures in Thailand,” the International Grains Council (IGC) said in its Grain Market Report.

It predicts a rise of 3% in world rice production in 2011-12, bringing it to 463 million tonnes. “Despite a further expansion in world use, to 459 million tonnes (449 million), the global 2011-12 carryover is expected to increase to 99 million (96 million),” it said. “The projected rise is largely due to increases in key exporters, namely India and Thailand, as well as in China.”

It forecasts a fall of 5% in world trade to 32.7 million tonnes because of reduced Asian imports.

In its World Agricultural Supply and Demand Estimates report, the U.S. Department of Agriculture (USDA) reduced production and consumption predictions for 2011-12. “World rice production is reduced 1.7 million tonnes to 463.7 million tonnes, still a record, largely due to lower projections for Burma, Colombia, Egypt and Indonesia, which are partially offset by increased projections for Bangladesh, Thailand and Vietnam,” it said. “Global consumption is reduced 4.1 million tonnes to 458.8 million, still a record, largely due to reductions for Burma, Egypt, India, Pakistan and Thailand, partially offset by increases for China, E.U.-27 and Iran.”

The USDA raised its figure for exports for 2011-12 by 800,000 tonnes to 33.9 million tonnes, down nearly 1 million tonnes from the record set in 2010-11. “Projected imports are raised for China, Egypt, E.U.-27 and Indonesia,” it said. “Forecast exports are raised for India, Vietnam and the United States, and lowered for Burma, China and E.U.-27.

“Global ending stocks are projected at 103.3 million tonnes, up nearly 3 million tonnes from last month, an increase of almost 5 million tonnes from 2010-11, and the largest since 2001-02. Burma, Indonesia, E.U.-27, Pakistan, the Philippines and Thailand account for the bulk of the upward revision in global ending stocks.”

The IGC’s report noted that most markets are up. “Global export markets for white and parboiled rice mostly strengthened during March, with the IGC-GOI Rice sub-Index advancing by 2%, to 213 points,” it said. “Amid logistical difficulties at India’s ports, renewed buying interest underpinned solid gains in Pakistan, while big purchases by China and the Philippines supported increases in Vietnam. Elsewhere, government policy continued to underpin the market in Thailand, but milled rice values at the U.S. Gulf edged lower in generally limited activity.”

It reported that broken rice values in Vietnam eased, with improving new crop supplies and competition from South Asian exporters. “However, the market subsequently recovered on fresh international buying interest, more than offsetting pressure from increasing export availabilities,” it said. “China purchased an unexpectedly large amount of rice in an effort to ease domestic market values which have moved markedly higher this year.”

“While there was a degree of uncertainty about the actual volume secured by Chinese buyers, the Vietnam Food Association indicated that exporters were contracted to deliver up to 500,000 tonnes,” it said. “Although traders suggested that China could buy more in the near future, purchases would likely be relatively small to avoid dampening domestic prices ahead of harvesting.”

The IGC also cited reports that the National Food Authority of the Philippines had purchased 500,000 tonnes of broken rice as supportive to the market in Vietnam. “Traders noted that it was now unlikely that the Philippines would buy 380,000 tonnes through private-sector channels as originally planned,” the IGC said.

The Council also reported rises in export quotations for white and parboiled rice in Pakistan, with 25% broken increasing by as much as 12% to a five-month peak of $425 fob before easing slightly thereafter. “Gains were underpinned by buying interest, especially from African importers, prompted by logistical difficulties at ports in India,” it said. “In that market, a slower pace of shipments, together with ample domestic availabilities, weighed on export prices, as offers for 25% broken fell by 4%, to $378 fob, a near three-month low.”

In Thailand, support mostly came from government intervention buying, due to run until the end of June. “However, renewed export demand, including the reported purchase of at least 350,000 tonnes by African importers mildly underpinned,” it said.

The more recent USDA ERS Rice Outlook report said that “except for parboiled rice, trading prices for Thailand’s rice have changed little since early March, as demand for Thailand’s non-parboiled rice remains weak. In contrast, price quotes from Vietnam have risen substantially over the past month, mostly a response to large purchases by China and the Philippines for delivery in the second quarter. U.S. long-grain milled-rice prices have fallen from a month earlier, continuing a downward trend that began in early October,” it said.