Rice prices unlikely to return to record next year, Wailes says

Rice prices are unlikely to return to records next year as supplies from Thailand and Vietnam, the world’s biggest exporters, may be enough to cover Indian and Philippine shortfalls, an agricultural professor said.

“Globally, the market fundamentals are still relatively sound,” said Eric Wailes, a agricultural economics professor at the University of Arkansas. “I would be surprised if we hit the kind of prices that we had in the spring of 2008,” he said.

Rice stockpiles in Thailand were forecast by the US Department of Agriculture in October at 3.5 million metric tons for the 2009-2010 marketing year, up from 2.5 million tons in 2006-2007, before prices surged. Inventory in Vietnam will be 1.7 million tons, from 1.4 million tons in 2007, the USDA said.

“That didn’t exist going into the spring of 2008” when prices reached a record, said Wailes, who co-wrote a 1998 study that predicted global rice demand would exceed production in 2009-2010, which the UN Food and Agriculture Organization and the USDA forecast this year.

Food price protests swept the globe last year after fears of shortages prompted producers including India to cut rice exports and importers increased purchases. Futures traded in Chicago surged to a record $25.08 per 100 pounds in April 2008.