STAFF REPORT ISB:  Pakistan is expected to have 9.4 million tons of paddy this year, 1.4 million tons less than previously foreseen, but still 2 per cent more than in 2011, UN Food and Agriculture Organisation (FAO) reveals in its just-published Rice Market Monitor.

However, it points out that the outlook has been somewhat dampened by reports of protracted water shortages in Sindh, as well as sustained concerns in Punjab over the stagnating basmati yields and its substitution with common varieties.

The rice monitor further went on to say that the sector is also constrained by energy shortages, which have impacted the local urea industry, putting significant upw0ard pressure on domestic fertilizer prices.

Sales of aromatic rice from Pakistan first came under increasing pressure by the February lowering of minimum export prices in India, followed in July by their complete removal. Moreover, failure to conclude a barter agreement with Iran, in the absence of a mechanism to circumvent financial sanctions on the country, further constrained sales in this segment.

Across the various regions, Asia is predicted to reap 657 million tons in 2012, 0.4 per cent above the outstanding 2011 performance. Such a modest growth reflects expectations of a poor season in India, but also in Cambodia, Taiwan, North Korea, South Korea and Nepal, all of which may see production drop in 2012.

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