The government?s decision to continue with the export ban on non-basmati rice may again push global prices up said a recent report submitted by the Philippines-based International Rice Research Institute (IRRI) which cautioned that because of the shrinking global trade, countries are being forced to draw into their rice inventories to meet immediate requirements.

?Currently, global rice stocks have declined from a 135-day supply to only a 70-day supply in the last seven years, recording a 40%-drop from 147 million tonne in 2001 to only 82 million tonne in 2008,? Samarendu Mohanty, head social sciences division, IRRI, said in the report ?Rice Crisis: The Aftermath?.

The benchmark Thailand rice has dropped to below $600 per tonne from an earlier high of $1,000 per tonne in the international market. Prices are expected to further plummet by the end of the year to $500-550 per tonne.

However, Mohanty said that during 2008-09, the global rice market was likely to remain tight, with higher overall consumption pushing prices up for the commodity, despite an estimated record production of 432 million tonne, a 1% increase over the year. He also said that export restrictions imposed by various countries would also constrain supply and push prices up.

India, which accounts for more than half increase in the projected rice area of one million hectare, during 2008-09, to 155.3 million hectare, is set to become an important player in this scenario, the IRRI said.

According to 1st advance estimates released by ministry of agriculture recently, India would be in a position to export about six million tonne of surplus rice by December out of an expected bumper crop of around 83 million tonne of non-basmati rice.

?Despite some reassuring supply numbers for 2008-09, there are huge uncertainties regarding the source of future growth in global rice output,? the IRRI recently said. The instituter said that the annual rice yield growth rate has dropped to less than 1% in recent years, compared with 2% – 3% during the 1960s.

Asian farmers plant rice primarily to meet the need for food. However about half of the crop is sold in the respective local markets.