The forecast rice production growth is expected to rely on larger plantings.– APP (File Photo)

ISLAMABAD, Aug 11: Pakistan is expected to reap 9.4 million tons of paddy in 2012, 1.4 million tons less than previously foreseen, but still 2 per cent more than in 2011, Food and Agriculture Organisation (FAO) of the United Nations says in its just-published ‘Rice Market Monitor’.

The forecast rice production growth is expected to rely on larger plantings, as prospects of favourable returns have stimulated a switch from other crops to rice cultivation, FAO says.

The report however pointed that the outlook has been somewhat dampened by reports of protracted water shortages in Sindh, as well as sustained concerns in Punjab over the stagnating basmati yields and its substitution with common varieties.

The rice monitor further went on to say that the sector is also constrained by energy shortages, which have impacted the local urea industry, putting significant upw0ard pressure on domestic fertiliser prices.

April forecasts of exports by Pakistan have been lowered by 200,000 tons, while still pointing to an eight per cent year-on-year expansion to 3.3 million tons. The reduction is consistent with lower estimates of production in 2011, but also with a slower pace of deliveries this year, particularly of Basmati varieties.

Sales of aromatic rice from Pakistan first came under increasing pressure by the February lowering of minimum export prices in India, followed in July by their complete removal. Moreover, failure to conclude a barter agreement with Iran, in the absence of a mechanism to circumvent financial sanctions on the country, further constrained sales in this segment.

While the sector still faces difficulties related to severe energy shortages, the overall good performance is expected to be sustained by ample and affordable availabilities of common varieties, shipments of which have been further aided by a
depreciating rupee.

FAO has lowered its April forecast of global paddy production in 2012 by 7.8 million tons following a worsening of the outlook in Asia. The downward revision mainly concerned India, where the critical monsoon rains were 22 percent short of the Long Period Average by mid-July.

At the new forecast level of 724.5 million tons (483.1 million tons, milled basis), global production in 2012 would be only marginally above the excellent 2011 results, recently further revised upwards.

Across the various regions, Asia is predicted to reap 657 million tons in 2012, 0.4 per cent above the outstanding 2011 performance. Such a modest growth reflects expectations of a poor season in India, but also in Cambodia, Taiwan, North Korea, South Korea and Nepal, all of which may see production drop in 2012.

FAO says that global rice utilisation in 2012-13 is projected to hover around 474 million tons, 6 million tons more than the 2011-12 estimate. Of these, 400 million tons are estimated to be used as food, up from 395 million tons in the previous year.

This would keep rice food consumption per capita stable around 56.6 kilo per annum, even though domestic prices in many locations are above those prevailing one year ago. Utilizations of rice for feed and for other uses are anticipated to change little, at 12.6 million and 61.4 million tons, respectively.

The FAO forecast of global rice inventories at the close of the 2012-2013 marketing years has been revised up by 200,000 tons to 164.5 million tons (milled basis). At that level, carryover stocks would be 6 per cent (or 8.6 million tons) larger than the previous year, marking the eighth consecutive season of stock accumulation.

As a result, the global stock-to-use ratio would be up to an estimated 34 per cent in 2013. Much of the reserve building this season is expected to be concentrated among exporting countries, while reduced imports may result in smaller reserves held by traditionally importing countries.