MANILA, Philippines–Global rice output is expected to recover in 2015 after a slight contraction in 2014, despite sliding prices and lower orders from exporters including the Philippines.
According to the Food and Agriculture Organization, palay production is seen bouncing back by 1 percent to 750 million tons worldwide this year.
The United Nations agency estimates that, in 2014, palay output shrank by 0.5 percent to 741.3 million tons. The contraction followed several years of bumper harvests.
“While nature was chiefly behind the lack of last season’s growth, a prolonged period of falling prices also played a role,” FAO assistant director general Hiroyuki Konuma said in a statement.
In particular, less-than-expected rains from last year’s monsoon season dampened production in India, one of the world’s biggest exporters of rice.
Based on the FAO’s Rice Price Index, international prices have fallen steadily since September 2014 and settled at a four-and-a-half year low of 219 points last March. The index is pegged at prices that prevailed from 2002 to 2004.
“Such low prices are encouraging several governments, especially in exporting countries, to engage in less supportive production policies and to pay more attention to other considerations, such as the negative environment impacts of rice cultivation, and the heavy budgetary implications of holding bulging public stocks,” Konuma said.
He added that this change in policy, which meant constant or lower prices as well as more stringent limits on rice cultivation, partly explained the modest pace of production growth forecast for 2015.