GENEVA(Commodity Online): The Food and Agriculture Organization of the United Nations (FAO) has raised its July forecast of global paddy production in 2012 by 4.2 million tons to 729 million tons (486 million tons, milled) because of the progression in the crop. Prospects have improved especially for India, but also Egypt, the Democratic Republic of Korea, the Philippines, the United States and Vietnam, while they worsened in Myanmar, Colombia and Senegal.

The international rice trade estimates has also revised by over 3 million tons, to 37.3 million tons (milled basis), 2 percent more than in 2011 and an all time record. Driving the 2012 trade surge are steadfast import demands by countries in the Near East and Africa, in particular the Islamic Republic of Iran and Nigeria and, in South America, Brazil and Venezuela. The trade expansion is also fostered by soaring purchases by China, which has turned into a net rice importer since 2010

Global rice production for 2012 is forecast to outpace consumption in 2012/13, resulting in an upward revision of 5 million tons in 2013 closing inventories, according to a new forecast by FAO's Rice Market Monitor (RMM).

Compared to last year, world rice carryover stocks are expected to rise by 7 percent, or 10 million tonnes, to a new high of almost 170 tonnes, marking the eighth consecutive year of stock accumulation," says the RMM. As a result, the world rice stock-to-use ratio is forecast to rise from 33.6 percent in 2012 to 35.5 percent in 2013.

In Asia, where rice is the staple food, FAO projects paddy output will reach 661 million tonnes, or 441 million tonnes on milled basis, up 0.8 percent on 2011, underpinned by widespread gains and particularly large increases in Bangladesh, China, Indonesia, the Philippines, Thailand and Viet Nam. "Beyond India, where production may fall by 4 percent, Cambodia, the Republic of Korea, Nepal and Turkey are also predicted to witness a decline."

Increasing rice production in Asia means that the region that consumes the most rice will not need to import so much of it. FAO forecasts that global rice trade in 2013 will reach 37.5 million tonnes (milled basis), marginally above the estimate for 2012, which was recently raised by more than 3 million tonnes to 37.3 million tonnes (milled), 2 percent more than in 2011 and an all-time record. The higher trade volume reflects expectations of large draw-downs from the huge inventories held by exporting countries as they make space for new crops.