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Ample global rice supplies to mitigate crop losses in Pakistan and China

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SINGAPORE — Abundant rice supplies from major exporters could largely offset an expected drop in output after floods in Pakistan and intense heat in China damaged crops, halting price gains on robust Asian demand.

Pakistan, the world’s fourth-largest rice exporter, suffered significant damage to agriculture, including rice, as floods devastated large swaths of its farmland, while extremely high temperatures in parts of China in late August hurt rice production in the country’s biggest world importer of basic products.

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However, global rice stocks are quite comfortable and an improved crop outlook in India should end any supply problems and limit any price gains from recent strong demand from Bangladesh, said a Singapore-based trader at one of the world’s top trading firms. rice

Pakistan is projected to lose about 10% of its estimated 2022 rice production of about 8.7 million tonnes, while China has suffered some damage, although the extent of crop losses is unclear, traders said.

Food prices have soared in markets across Pakistan as devastating rains wipe out crops and disrupt supplies, an early sign that the worst floods in decades are creating food shortages amid a financial crisis.

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“Rice production in Pakistan has been very good in recent seasons,” said Peter Clubb, market analyst at the International Grains Council. “While any big loss in production is obviously a bad thing, the improvement in production in recent seasons gives a little leeway.”

China’s Agriculture Minister Tang Renjian expressed concern that high temperatures and drought have affected rice production in the eastern provinces of Jiangsu and Anhui.

“It’s still too early to tell how low yields (in China) could be,” Klubb said. “Overall, there is still a lot of inventory in China.”

MONSOON BOOSTS CROP PROSPECTS IN INDIA

Monsoon rains that have been delayed in India’s northern and eastern rice-growing regions have improved over the past couple of weeks, boosting crop prospects in the world’s biggest rice supplier, traders said.

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Earlier, India considered the need to limit the export of 100% milled rice, which is mainly used for feed purposes.

But improved rainfall in India’s rice-growing areas has ended any discussion of government export restrictions, said a second trader in Singapore who sells Indian rice to buyers in Asia and Africa.

The UN Food and Agriculture Organization’s global price index fell for a fifth month in August after hitting a record high in March following Russia’s invasion of Ukraine, as a resumption of grain exports from Ukrainian ports helped improve the supply outlook.

However, strong demand from Bangladesh has supported rice prices in recent weeks.

Bangladesh plans to import about 1.2 million tonnes of rice over the next few months to boost stocks and reduce high domestic prices.

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A senior official in Bangladesh’s food ministry said the country is buying 530,000 tonnes of rice from India, Vietnam and Myanmar in government-to-government deals and is in talks with major producers India, Vietnam and Thailand.

Indian rice prices rose to their highest level in more than a year last week at around $383 a tonne although the market is well below the 2021 high of $405 and the 2020 peak of $427.50.

Thailand and Vietnam, the world’s second and third largest rice exporters respectively, have agreed to cooperate in raising prices, a move aimed at increasing influence in the world market and boosting farmers’ incomes. (Reporting by Navin Thukral; Additional reporting by Nigel Hunt in London and Ruma Paul in Dhaka; Editing by Christian Schmollinger)

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