The global rice trade is expected to decline 5 per cent year-on-year in 2012 due to falling demand, the United Nations’ Food and Agriculture Organization (FAO) said Wednesday.

Last year’s rice exports reached a record 34.5 million tons but are expected to drop to 32.8 million tons in 2012, according to FAO estimates.

“Among the countries expected to import less rice in 2012 are Bangladesh, Indonesia, Nepal, Nigeria and the Philippines,” the FAO said. Production is up in those countries, reducing the demand for imports.

Thailand, the world’s leading rice exporter for five decades, shipped 10.5 million tons last year, but the kingdom will ship less in 2012 due to a government price-guarantee scheme that makes its export prices uncompetitive, the FAO predicted.

The policy has already reduced rice shipments by 50 per cent year-on-year since November, according to the Thai Rice Exporters Association.

The association predicted Thailand’s rice shipments will fall as much as 40 per cent this year, to about 6.5 million tons.

Shipments from Cambodia, China, India and Pakistan appear set to increase this year, the FAO said.

The U.N. agency noted that rice prices had dropped 7 per cent since October, and the trend was likely to persist in 2012.

“The downward trend in rice prices is expected to persist in coming months as demand continues to weaken, and harvests in Northern Hemisphere countries and those along and south of the equator add supplies to the market,” the FAO said.

Keywords: rice exports