In India, Rice is currently occupying one quarter of total cultivated area and has acquired 40 to 43 percent of the food grain production making it the second largest producer of rice. The global production of rice is 19.70 percent and in past two years the average retail price has been around 48 percent to Rs.1, 942 per quintal. But even though rice prices have shot up in recent times, one can predict prices to drop in near future on rabi crop production it results in Rabi Crop to Comfort Rice Prices in India.

In past, rice production sinked by around 10 million tonnes in Kharif season due to draught which tortured one third of the country forcing government to increase public distribution system and get involved in market to control price rise.

As per the latest data, India is the world’s fifth largest rice exporter and it exported 20 Lakh tones of rice in 2009-10, whereas Thailand accounts for 85-100 Lakhs tones of shipments per year, followed by Vietnam (55 Lakh ton), US (31.50 Lakh ton) and Pakistan (38 Lakh tons).

From the starting of the year, the price of rice have jumped more than 19% on Chicago Board of Trade (CBOT), however prices are under stress for some duration due to rise in supply from Thailand and Vietnam. Thailand will be harvesting second crop which will be around of roughly 7 million tones and further rise in supply has been predicted of Thailand’s B-grade white rice to as low as $510, a major fall compared with record of $ 1080 per tonne in 2008. But prices have got some break from steep fall due to stockpiling by government in Thailand and Vietnam.

As per the reports, total rice purchased by Food Corporation of India (FCI) and state agencies is at 25.13 million till date versus 25.57 million tonnes in previous season. Rice acquisition by the Indian government has already crossed 25 million tonnes in current 2009-10 Kharif marketing season that is 2.9 million short of target and rabi crop is full of stock i.e Rabi Crop to Comfort Rice Prices in India

The World’s total trade in rice is estimated around 30,845,000 tonne for 2009-10, that is 7 percent higher than previous years’ 29,029,000 tonne. In India ban on exports of non-basmati rice may continue further and scrap duty on imports will encourage private imports of grain and hence a drop of 16 to 18 million tones of monsoon sown rice output..

In India current demand is projected at 128 million tonnes by 2012, requiring a production level of 3000 Kg per hectare. Hence in medium to long run, we may face a demand and supply mismatch that further continues to support prices at lower levels. Currently rice ranks as third principal staple food in the world and area planted in South Asian nation this year is 7 million hectares.

CBOT benchmark May rice contract fall from $16.45 per hundred pounds in December 2009 to a low of $12.12 on March 21, 2010. Support has been observed at $11.90 and $11.20 and future are likely to be under pressure as long as resistance is seen at $12.90.