— amid indications of rising world prices
A TEAM from Venezuela is due here this week to continue negotiations on Guyana rice exports there amid indications of rising prices for the grain on the world market.

The Agriculture Ministry yesterday said Agriculture Minister Robert Persaud last week dispatched two industry officials to Venezuela to secure additional markets for Guyana’s rice.

It said Mr. Jagnarine Singh, General Manager of the Guyana Rice Development Board (GRDB) and Mr. Dharamkumar Seeraj, General Secretary of the Guyana Rice Producers Association (GRPA) met Venezuelan authorities for talks on securing additional markets.

This initiative is part of the government’s continued support to the rice industry, particularly farmers, to ensure they continue their activities, the ministry reported.

It said that following successful discussions led by the Guyana officials in Venezuela, a delegation from Venezuela will be visiting Guyana this week to follow up and finalize purchases of rice from Guyana.

“This will ensure lucrative returns for farmers,” it said.

The ministry noted that the global economic crisis has seen a reduction in the international rice trade with the international prices for rice declining from a previous peak.

But the Bloomberg news agency last week reported that declining global rice stockpiles and lower production in India will push prices higher.

Jim Rogers, Chairman of Rogers Holdings said: “The world is very vulnerable to production problems.”

Rogers, who predicted the start of the commodities rally in 1999, said in an interview: “We’re already seeing it in India. That’s going to mean higher prices somewhere along the line.”

Rice stockpiles of the world’s five largest exporters are forecast to plunge by a third to the lowest level in five years, and below last year when prices surged, Concepcion Calpe, senior economist at the United Nations Food and Agriculture Organization (FAO), said at a conference in Bali Friday.

Global rice prices soared to a record US$25.07 per 100 pounds in April 2008 on declining inventories, sparking concern over a global food crisis. This prompted exporters including India and Vietnam to curb sales, cutting supplies for countries like the Philippines, the biggest importer. Prices have almost halved since then as farmers boosted production, replenishing stockpiles.

The contract for November delivery jumped 1.9 per cent to US$13.48 per 100 pounds Friday on the Chicago Board of Trade, the steepest gain since August 31, and was little changed at US$13.495 at 2:42pm in Singapore.

Total stockpiles held by Thailand, Vietnam, the US, Pakistan and India will fall to about 20 million metric tons at the end of the marketing year on September 30, from 30 million tons a year earlier, on lower-than-forecast crops and rising demand for imports, Calpe said.

The weakest monsoon in India since 1972 may cut the nation’s rice production by about 18 per cent in the marketing year that began October 1, Calpe said in an interview Wednesday.

Floods now affecting the south of India will also reduce production, Junior Food Minister, KV Thomas said Tuesday.

The flooding will cut production by at least 3 million tons, the Hindu Business Line reported Friday, citing N Raghuveera Reddy, state farm minister for Andhra Pradesh.

The last time stockpiles of the five largest exporters fell by a third was in 2002-2003, when India “had a bad monsoon, and prices then were low,” Calpe said.

Rough rice futures on the Chicago Board of Trade reached a low of $3.52 in April 2002.

Tropical Storm Ketsana and Typhoon Parma destroyed at least 7 per cent of the Philippines fourth-quarter crop in the past week, and wiped out inventories in parts of the country. The Philippines may import 2 million tons of rice in 2010 to cover losses from the storms, National Food Authority Assistant Administrator, Jose Cordero said in an interview in Bali .

Indonesia state food company, Bulog said Tuesday the country may shelve plans for its biggest rice exports in at least 50 years if dry weather caused by El Nino causes production to miss a state forecast of 40 million tons.

Rice production in Pakistan, the world’s fourth-largest exporter, is forecast to drop 4.8 per cent this year from a year ago, Safder Hussain Mekhri, a vice-chairman with the Rice Exporters Association of Pakistan, which accounts for about 95 per cent of the nation’s shipments, said in an interview.

Output may drop to 6 million tons this year from 6.3 million tons last year, he said, while exports may be little changed at 3.1 million tons.

“Supply is going to get tighter,” Rogers said in an interview late Thursday. “Production is going down for a variety of reasons. Many farmers cannot get loans,” thereby limiting their ability to raise yield and expand acreage, he said.

Higher reserves in China, the world’s largest grower and consumer, may help slow the decline in total global stockpiles to 3 percent to 117.4 million tons, Calpe said, adding:

“…we’ve not considered the flooding in the Philippines and El Nino in Indonesia, because we did the estimate on September 25. Next year, if there’s a bad year, then things are going to be more serious because then we’d have to work from much lower stocks.”

The impact of El Nino, which can delay rains in Asia and cause flooding in South America, may also push global production lower next year, forcing affected countries to draw down inventories, she said.

“Indonesia is especially at risk and Australia of course,” Calpe said, referring to El Nino. The weather phenomenon may also lower yields in South America “because if it’s cloudy, they won’t get the proper sun and that’s very important for yields.”

While the slump in Indian production will drag total volume down, not all of the major exporters will see output and stockpiles drop, Calpe said.

Rice production in Vietnam, the world’s second-largest exporter, may climb to a record of between 37.9 million tons and 38.3 million tons in 2010, Pham Van Du, deputy director general of Vietnam ’s Crop Production Department, said Thursday.

Typhoon Ketsana destroyed at least 100,000 tons of the Vietnamese rice crop, Pham said in an interview in Bali Friday. The losses are unlikely to lower significantly the nation’s rice output, he said. Production is forecast to reach a record 37 million tons this year, the USDA said in a report last week.

“At the moment, there is no evidence of supply shortages in the market,” Calpe said, adding that last year’s record prices were “not really triggered by shortages, it was an overreaction by governments and the market.”