World rice markets are likely to remain tight next year despite an expected record harvest after key producers clamped down on exports, the International Rice Research Institute (IRRI) said on Wednesday.

Export prices of one of the world's most important grains almost tripled between last November and May, triggering riots in more than a dozen countries, before softening to still historically high levels of more than 700 dollars a tonne.

"The 2008-2009 rice market is likely to remain tight even with projected record global production of 432 million tonnes, a one percent increase over last year's 428 million tonnes," the Philippines-based institute said in its quarterly publication "Rice Today".

The projected rise in output is mainly due to an extra one-million hectares planted with rice, to a total 155.3-million hectares, with India accounting for more than half of the total increase, it said.

After reaching a record low of 73-million tonnes in 2004-2005, global rice stocks have been steadily rising and are projected to reach 82-million tonnes in 2008-2009, compared with 78.5-million tonnes in the previous harvest.

Prices are likely to remain high

However, "prices are likely to remain high partly in response to export restrictions imposed by key rice-producing countries," IRRI said.

Stocks in the United States, one of the few countries to resist imposing trade barriers during the recent crisis, "are projected to decline further, further destabilising the market in the coming months," it added.

The non-profit research institute said consumption was expected to remain strong "because of substitution away from more expensive food such as fruits, vegetables and livestock products."

It projected global consumption would rise around one percent to 426-million tonnes in the 2008-2009 period.

"Increasing rice production through area expansion is also unlikely in most parts of the world because of water scarcity and competition for land from non-agricultural uses such as industrialisation and urbanisation," it added.

With rice areas close to a historic high, "it would be prudent to assume that world rice area will remain or even fall below this range in the next 10-15 years."

The institute repeated its call for increased investment in agriculture to boost rice yield growth, which has dropped to less than one percent, compared with 2-3 percent during the technological breakthroughs of the Green Revolution between 1967 and 1990.

It said the world would need an extra 59-million tonnes of milled rice by 2020 above the 2007 consumption of 422-million tonnes.

AFP