'Asia's 2002 rice output may be affected by El Nino'

'Asia's 2002 rice output may be affected by El Nino'

Dow Jones, Bangkok

A likely return of the drought-inducing El Nino weather phenomenon this year could affect rice paddy harvests in Asia, the United Nation's Food and Agriculture Organization, or FAO, said Friday.

An expected recurrence of the El Nino weather condition could affect paddy output in the Philippines and Indonesia, according to the FAO's latest Rice Market Monitor released in Bangkok Friday.

The El Nino weather, known to take place once every two to seven years, last hit the Asian region during 1997-98, when it caused severe drought and serious damage to agricultural production, particularly in Indonesia, the Philippines and Papua New Guinea, the FAO said.

Based on recent observations, the national Oceanic and Atmospheric Administration is considering a possible return of El Nino next spring, although there is still considerable uncertainty over its strength and amplitude, the FAO said.

Excessive rain so far in Indonesia and a recurrence of the El Nino "could stand in the way of the ambitious target of 53.9 million metric tons (of paddy) set by the (Indonesian) government for 2002 against the 50.1 million tons of output in 2001," it said.

The 2002 paddy crop is underway in the Southern Hemisphere, and the harvest season has just begun in Indonesia, the FAO said.

Uncertainty from the El Nino also surrounds the 2002 paddy harvest in the Philippines, where its 2001 rice production was affected by Typhoon Lingling in November last year, the FAO said.

Amid the uncertainty of the El Nino's effect on Asian rice output, international rice trade is forecasted to grow to 23.8 million tons, from 23.4 million tons in 2001, it said. An expected increase in international rice trade this year has mainly contributed to a surge in imports by China and Indonesia, the FAO said.

China is expected to import nearly 1 million tons this year under its obligation to the World Trade Organization, while Indonesia is expected to step up rice imports by 50% to make up for its disappointing 2001 domestic harvest, it said.

An expected slump in African rice imports in 2002 appears to have capped further growth in 2002 international rice trade. African rice imports are expected to fall to 6.3 million tons, from an exceptionally high 7.1 million tons in 2001, due to large stocks and an anticipated rise in international rice prices, the FAO said.

World rice prices are continuing to recover amid gains in Thailand following its government's intervention in the domestic paddy market coupled with strong import demand due in part to a temporary export ban by Vietnam, it said.

The Vietnamese government this month, however, lifted the ban, which had been imposed since November last year, and allowed exports from the middle of February onwards.

However, the Indian government's huge rice stock of around 24.8 million tons would encourage subsidized export prices in the country and put pressure on the international market, the FAO said.