Farmers could get $5,000 per bag paddy in coming crop

Feb 08, 2011 News

– Agri Ministry

Rice price is expected to climb, at least for farmers, in the coming crop, as the U.S. planted less than it did since 1989, just as global demand surpasses production for the first time in four years.
Prices in December recorded a 12 per cent increase on the world market.
According to the Guyana Rice Development Board yesterday, while sowing is now underway, rice projections are looking good with the weather currently holding up.
For two years in a succession, Guyana broke production records, last year touching more than 360,000 tonnes for one of the country’s big earners. During last crop, farmers were getting at least $3,000 per bag.
The Ministry of Agriculture has not ruled out a $5,000 mark being reached as overseas demands rise, a situation that happened two years ago during a food crisis.
Planting in the U.S., the third-biggest shipper, may drop 25 percent this year because growers can earn more from corn and soybeans, according to the median in a Bloomberg survey of nine analysts and farmers.
Rice, the staple food for half the world, declined four percent last year, extending a 2.9 percent drop in 2009. The other crops jumped 34 percent or more.
“Why would you want to take that risk to plant rice, knowing that your income is going to be way down?” said Terry Hatley, a farmer in Marked Tree, Arkansas, who may not plant any rice this year after growing the crop for more than three decades.
“Farming is a business, and you’ve got to look at the economics of it. Now, the economics on rice are very dim.”
Bangladesh, South Asia’s biggest buyer, doubled a target for imports in 2011 to curb prices, the Directorate General of Food said last week. The Philippines, the world’s largest importer, will probably start buying next month, according to the National Food Authority. While global stockpiles are predicted to be 26 percent higher this year than in 2007, consumption will gain 3.4 percent and harvests 2.6 percent, the U.S. Department of Agriculture estimates.
The Thailand export price, the benchmark in Asia, may climb as high as US$600 a metric ton by December from $534 on Jan. 26, a gain of 12 percent, according to the median estimate in a Bloomberg survey of eight traders, exporters and analysts.
Rice represents almost 50 percent of the food expenses of the poorest across the developing world, and 20 percent of total household spending, according to the International Rice Research Institute, based in Los Banos, the Philippines.
In the U.S., 6 percent of incomes are spent on groceries, data from Euromonitor International show.
“There are so many reasons for prices to move up,” Dwight Roberts, president of the Houston-based U.S. Rice Producers Association, said by phone. “We sure are poised for a strong and upward movement in the market.”

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Farmers could get $5,000 per bag paddy in coming crop

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