The Food and Agriculture Organization (FAO) has stated in its latest report on the global crop prospects that India may face a decline up to 20% in rice export business in 2016. The rise in domestic demand for rice coupled with tight supply is the main reason for this decline.
India is the second largest rice producer in world, whereas China holds the leading position. India is slated to export around 10 million ton rice in 2015. The figure is same as the previous year, the report tells.
The increase in the exports from Vietnam and Thailand is expected to cover up for the declining exports in India. In 2015, India is projected to yield 103.5 million tons of rice, as per the report. Further, the report added that the global production of rice is projected to decline and reach 499.3 million tons in 2015, whereas the sales volume for the year 2016 is expected at 42.1 million tons. The organization has stated that the prices for rice, globally, have been on a declining mode for the previous ten months, aromatic rice witnessing highest fall.
The cost of rice is undergoing declining phase in Thailand, Vietnam, India, and America. In June, 2015, the Thai rice export price dropped to US$385 per ton from US$419 per ton in June, 2014.
In spite of continual apprehensions over El Nino, FAO finds the global crop prospects to be on the positive side in 2015. But the price trends around the world and the positive future prospects for global yield of cereal offset domestic issues pertaining to food insecurity, added the report.