Estimates of world paddy production in 2006 have been cut by 2 million tonnes since December 2006, to 629 million tonnes. At that level, the 2006 paddy season, just concluded, would yield 4 million tonnes less than the record achieved in 2005. Much of the contraction is anticipated to reflect smaller crops in Asia, which were negatively affected by an irregular pattern of the monsoons and insect attacks. Production also fell in Latin America and the Caribbean, but rose in Africa for the fifth consecutive year. Results were mixed in the rest of the world.

The first forecast of world production in 2007, although still very tentative, points to a recovery to 633 million tonnes, matching the 2005 record. The upturn would be driven by developing countries, since production in the developed countries is anticipated to fall for the third consecutive year, bringing their participation down to less than 4 percent of the world total. Expectations of growth generally reflect positive price expectations and renewed institutional support to the sector, but also assume a return to average growing conditions.

Much of the 2007 expected production gains are expected to originate in Asia, where all the major producing countries are foreseen to grow more rice this season, with a few exceptions. Among these, production may fall in Japan and the Republic of Korea, a consequence of undergoing sectoral reforms, but also in Indonesia, where a late arrival of the rainfall reduced plantings, and in Sri Lanka. On the other hand, strong output growth is anticipated in Bangladesh, Cambodia, the Islamic Republic of Iran, Laos, Malaysia and Nepal, with more modest gains foreseen for China, India, Thailand and Viet Nam.

In Africa, a further increase in paddy output may be witnessed in 2007, provided growing conditions in the coming months are not unfavourable. Much of the increase would be prompted by rising prices but also by government support to the sector. However, in Madagascar, where the season is already quite advanced, production may fall, as a result of heavy floods that hit the country early this year.

In Latin America and the Caribbean (LAC) , the outlook is positive in Central America and the Caribbean, but negative in South America, especially for Argentina, Brazil and Uruguay. However, Colombia, Guyana, Peru and Venezuela may all reap larger crops, owing mainly to improved return prospects, which could boost plantings.

For countries belonging to other regions, expectations are mixed: again in the grip of drought, Australia is set to harvest one of the smallest crops on record. A 3 percent decline is foreseen in the United States, where producers are shifting to more profitable crops. This contrast with positive prospects for the EU, where the sector is set to recover from last year's lack of rainfall, and for the Russian Federation, where reduced external competition, following the stepping up of border protection, is anticipated to stimulate production further.