Despite adverse weather conditions in many of the worlds leading rice producing countries, global rice production is forecasted to reach 720.7 million tons - the highest level ever.
The "Rice Market Monitor" report for November issued by the Food and Agriculture Organisation of the UN has noted that both yield per hectare and total area under cultivation have witnessed significant improvements during CY11.
Higher than expected production in Bangladesh, China and other Asian countries along with the return of India to the global rice scene are the main contributors to improved rice production.
Meanwhile production in Pakistan, Indonesia and some other regions is expected to be stymied this year.
The international prices for rice as shown by the FAO rice price index, remained high throughout the first three quarters of CY11 until India returned to the global rice scene in October putting downward pressure on rice prices.
Overall, on annual basis from Jan-Oct the prices were on average 13 percent higher than in 2010.
The global rice trade forecast was raised by 9 percent to 34.3 million tons in 2011 backed by large demand from Asian and African countries.
On the supply side the impact of higher producer prices set up by Thailand was somewhat nullified by the return of India to the global rice market.
Unfortunately, all was not well for Pakistan as it experienced a considerable decrease in exports.
Forecasted exports for 2011 currently stand at 2.7 million tons, roughly 23 percent lower than the tally last year.
This was mainly due to devastation caused by the recent floods.
However, the surge in food prices and the availability of carry-over stocks provided some much-needed cushion.
The forecast for rice utilisation shows an increase of 2 percent in 2012; however, the global rice trade is expected to fall by 1 percent because demand for rice imports from Asian countries will likely fall on the back of better local production.
FAO has also raised its forecast of global rice inventories in 2012 by four million tons to 149 million tons; "the highest carry-over since 2000-01".
However, what Mother Nature has in store for rice producing economies may well dictate the dynamics of international rice trade in coming months.