Record rice crop to curb food inflation

SINGAPORE: At a time when droughts are driving corn and soybeans to all-time highs, farmers are set to reap a record rice crop and Thailand is building the biggest stockpile in at least five decades, helping avoid a global food crisis. The largest exporting nation bought 11 million tonne as of July , enough to supply the six biggest importers, commerce ministry data show.

As corn farmers from the US to Ukraine endure drought, paddy fields will yield 1.1 million tonne more milled grain, the US Department of Agriculture predicts. Benchmark 5% Thai white rice will drop 14% to $480 a tonne by December 31, according to the median of 10 estimates from traders and analysts surveyed by Bloomberg. Shipments of the staple for half the world will expand 2.6% to a record in 2012-2013 , the USDA predicts .

Those exports combined with Thailand’s stockpiles, which may be cut to clear space for the next harvest , are a buffer against grain reserves seen at the lowest in at least five years. Cheaper rice may contain global food costs the United Nations predicts will rebound, ending a retreat to a 21-month low in June.

“Rice is the only bright spot which is keeping us away from a global food crisis,” said Abdolreza Abbassian, a senior economist at the UN’s Food & Agriculture Organisation in Rome. “The corn situation is very worrisome, while with wheat, the overall supply situation is still adequate.” Rough-rice futures rose 7.1% to $15.92 per 100 pounds on the Chicago Board of Trade this year.