00:00 UK, 15th October 2008, by Mike Verdin
Rice market could remain tight for years

The rice market should stay tight next year, and may remain under pressure from population growth until at least 2020, the International Rice Research Institute has said.

While record rice production of 432m tonnes next year will eclipse global demand of 426m tonnes, small inventories, which remain at roughly half the levels of the turn of the century, coupled with state-imposed controls will bolster the market.

"Prices are likely to remain high partly in response to export restrictions imposed by key rice-producing countries," the institute said in its quarterly Rice Today report.

Longer-term, growers will need to raise annual production an extra 59m tonnes of milled rice - equivalent to 89m tonnes in the paddy - by 2020 to satisfy demand caused by population growth.

"Consumption may go even higher if prices of other food items remain high, causing slow progress in diet diversification in developing countries," the report said.

Raising production would remain difficult without increases in the area set aside for paddies, which had remained around 155m hectares for the past two decades, or in improving crops. The average growth in rice yields had fallen below 1%, compared with 2-3% in the 1967-90 period.

"The current crisis serves as a timely wake-up call for governments, multinational organisations and donors to refocus on agriculture," the Philippines-based institute said.

The IRRI, whose launch in 1960 was funded by the Ford and Rockefeller foundations, receives financial support from governments and organisations such as the World Bank and the International Potash Institute.

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