Pakistan is entering the age of modern barter system as it is negotiating with the Philippines to swap sugar with rice.
If a deal between the two countries strikes, the modern barter systems will allow Pakistan and the Philippines to bypass money systems for commodities.
Pakistan and the Philippines have surplus rice and sugar, respectively, and talks were currently under way to barter the two items to avert any shortfall in the two countries, said Federal Minister for Food, Agriculture and Cooperatives Nazar Mohammad Gondal here on Monday.
The Philippines, which is one of the leading rice-consuming countries in Asia and the Pacific, is learnt to have shown interest to buy rice from Pakistan. Pakistan has surplus stocks of rice, but it is deficient in sugar.
The Economic Coordination Committee of the Cabinet at its recent meeting had discussed the disposal of super basmati rice from 2008-09 crop lying in Passco storage houses and approved export of rice to the Middle East, Iran, Europe and other markets officially.
Shortage of sugar in Pakistan has nearly doubled its price in the open market. While the commodity was available in the market at Rs65 to Rs70 per kilogram, state-controlled Utility Stores Corporation was selling sugar at Rs38 per kg. However to rationalize the price of sugar, the government raised the price of sugar from Rs38 per kg to Rs45 per kg.
Barter system still exists and some 50 per cent of all production and transactions take place outside official money-based GNP-measured sectors of the world’s economies.
A UN report had estimated bartered production at $16 trillion– simply missing from global GDP figures.
Monday 8 February 2010
Thailand offers to sell 1-M T rice to Philippines: Yap
Thailand, the world's biggest rice exporter, has offered to sell up to 1 million tons of rice to the Philippines, the largest buyer, in a government-to-government arrangement, Manila's agriculture minister said on Tuesday.
Arthur Yap said the offer is on top of a Philippine proposal to buy only 370,000 tons tariff-free rice annually from Thailand in exchange for Manila's refusal to cut rice import duty fully under a regional trade agreement.
"That's what's on the table right now," Yap told reporters about Thailand's offer.
Arthur Yap said the offer is on top of a Philippine proposal to buy only 370,000 tons tariff-free rice annually from Thailand in exchange for Manila's refusal to cut rice import duty fully under a regional trade agreement.
"That's what's on the table right now," Yap told reporters about Thailand's offer.
Philippines, protests build up vs.rice price surges
Members of the network Bantay Bigas staged another picket yesterday in front of the Department of Agriculture national office to protest the increase in the prices of rice, a press release from the group said.
The picket was its second rally in the past two weeks, it said.
Members who picketed in front of the DA did a noise barrage using empty plates and spoons to dramatize their demand for a rice price affordable to ordinary Filipinos, the press release said.
They vowed to continue holding protest actions in front of the DA until their demand is heard.
Lita Mariano, Bantay Bigas spokesperson asked, “Why rice is priced at around P30 when farmers say that they sold rice to traders for only P8 to P11.”
The rule of thumb by the National Food Authority is that rice is sold at the market for twice the price that farmers sell rice to traders. Thus, rice sold at P8 to P11 should only be sold for P16 to P22 at the market, the group claimed.
Bantay Bigas also belied Department of Agriculture Secretary Arthur Yap's statement that there is a steady supply of rice, the press release said.
The press release also said that a study conducted by Bantay Bigas in Central Luzon found that farmers only earned P34 per day or below the poverty threshold of $2 or P100 per day.*
The picket was its second rally in the past two weeks, it said.
Members who picketed in front of the DA did a noise barrage using empty plates and spoons to dramatize their demand for a rice price affordable to ordinary Filipinos, the press release said.
They vowed to continue holding protest actions in front of the DA until their demand is heard.
Lita Mariano, Bantay Bigas spokesperson asked, “Why rice is priced at around P30 when farmers say that they sold rice to traders for only P8 to P11.”
The rule of thumb by the National Food Authority is that rice is sold at the market for twice the price that farmers sell rice to traders. Thus, rice sold at P8 to P11 should only be sold for P16 to P22 at the market, the group claimed.
Bantay Bigas also belied Department of Agriculture Secretary Arthur Yap's statement that there is a steady supply of rice, the press release said.
The press release also said that a study conducted by Bantay Bigas in Central Luzon found that farmers only earned P34 per day or below the poverty threshold of $2 or P100 per day.*
Thailand to Open Bid for Rice Sale From Stockpiles
Thailand, the world’s biggest rice exporter, will open bids Jan. 21 to sell grains from stockpiles to benefit from prices that have surged on growing demand from countries like the Philippines.
The country plans to sell 300,000 tons of white rice and 75,000 tons of glutinous rice, Vichak Visetnoi, director general of the Department of Foreign Trade, told reporters. Reserves will fall to 5.125 million tons after the sales, he added.
Rough rice has risen 22 percent on the Chicago Board of Trade from last year’s low as the Philippines advanced imports after storms wiped out 1.3 million tons of the nation’s crops and on concern India may become a net importer after a drought pared harvests last year.
“The timing is right at the moment, with increased demand from many countries,” Vichak said in Bangkok. “Prices are also attractive.”
Thai rice prices, used as a benchmark across Asia, climbed 16 percent to $609 a metric ton in the week of Jan. 13 from last year’s low. The price is set weekly. Rice futures for delivery in March fell 0.2 percent to $13.99 per 100 pounds in Chicago on Jan. 15. The U.S. is closed today for a holiday.
Rice exports from Thailand this year may be as much as 9.5 million tons, compared with 8.57 million tons last year, Vichak said Jan. 4. Output in the crop year started Oct. 1 may fall by as much as 15 percent from the previous year to 27 million tons, because of dry weather, Apichart Jongskul, secretary general for the Office of Agricultural Economics, said Jan. 13.
The country plans to sell 300,000 tons of white rice and 75,000 tons of glutinous rice, Vichak Visetnoi, director general of the Department of Foreign Trade, told reporters. Reserves will fall to 5.125 million tons after the sales, he added.
Rough rice has risen 22 percent on the Chicago Board of Trade from last year’s low as the Philippines advanced imports after storms wiped out 1.3 million tons of the nation’s crops and on concern India may become a net importer after a drought pared harvests last year.
“The timing is right at the moment, with increased demand from many countries,” Vichak said in Bangkok. “Prices are also attractive.”
Thai rice prices, used as a benchmark across Asia, climbed 16 percent to $609 a metric ton in the week of Jan. 13 from last year’s low. The price is set weekly. Rice futures for delivery in March fell 0.2 percent to $13.99 per 100 pounds in Chicago on Jan. 15. The U.S. is closed today for a holiday.
Rice exports from Thailand this year may be as much as 9.5 million tons, compared with 8.57 million tons last year, Vichak said Jan. 4. Output in the crop year started Oct. 1 may fall by as much as 15 percent from the previous year to 27 million tons, because of dry weather, Apichart Jongskul, secretary general for the Office of Agricultural Economics, said Jan. 13.
Thailand rice price update
Despite a reduction in domestic prices, export prices increased approximately 1.0 percent from the previous week due to a strengthening Thai baht to 33.0 baht/$. The Government has yet to release its rice stocks, however officials have been ordered to inspect the quality and quantity of outstanding stocks, a signal that a release is imminent.
Vietnam rice prices
Price offers for rice for export were down significantly in the first week of 2010. There were no offers at all for 15 and 25 percent broken rice, because much of this rice was allocated to fulfill sizable outstanding government export contracts. Local paddy prices decreased last week on poor demand from the export market.
Philippines May Lose 400,000 Tons Rice Output, Official Says
The Philippines, the world’s biggest rice importer, may lose as much as 400,000 metric tons from its first crop this year as an El Nino event reduces rainfall in some provinces, a government official said.
Some farmers may switch to other crops if water flows to regions distant from dams are restricted “under extreme conditions,” Joel Rudinas, acting agriculture undersecretary for operations, said in a phone interview from Manila today. The Philippines has two rice crops a year, with the 2009 first harvest yielding 7.4 million tons.
Imports by the Southeast Asian nation may jump to a record 3 million tons this year, from 1.78 million tons, if El Nino parches crops or another typhoon hits the country, National Food Authority Spokesman Rex Estoperez said in November. The country has so far secured 2.2 million tons from overseas suppliers for delivery this year, he said Jan. 8. The Philippines advanced purchases after storms slashed production in 2009.
“I think they will return to the market only in June when prices have softened,” Rakesh Singh, a trader at Emmsons International Ltd. in New Delhi, said by phone today. “It doesn’t make sense for them to enter the market at this moment because prices are already high,” he said.
El Nino, the weather pattern that can reduce rainfall or prolong the dry season in parts of Asia, also threatens to curb output in Thailand, potentially limiting the capacity of the world’s biggest rice exporter to boost shipments to meet additional demand.
The export price of the 100 percent grade-B Thai white rice, the benchmark in Asia rose 16 percent to $609 a ton in the week of Jan. 13 from last year’s low.
Rice Futures
Rice futures in Chicago rose to a record in April 2008 and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.
Rough rice has jumped 25 percent in Chicago from last year’s low as the Philippines advanced imports after storms wiped out 1.3 million tons of the nation’s crops. The March- delivery contract closed at $13.975 per 100 pounds on Jan. 15. Trading is suspended today for a public holiday.
Acting Philippines Socioeconomic Planning Secretary Augusto Santos said El Nino may cause a “water crisis,” curbing the nation’s agricultural production and hurting the domestic economy, the Manila Times reported today.
Northern Luzon’s Isabela province, the nation’s second- largest rice producer, is most at risk from production losses because of the dry weather, Rudinas said.
Cloud Seeding
El Nino “at its worst” would definitely affect the Philippines rice shortfall, he said. Still, steps such as cloud seeding are being planned to boost water supply in rice areas, he said.
The water level in Angat dam, which supplies 97 percent of water in the capital region dropped 5 percent to 201.43 meters as of Jan. 13 because of El Nino, the Manila Times reported. If the decline continues, water supply from the dam to farms in Bulacan and Pampanga may be cut, the newspaper said, citing the Metropolitan Waterworks and Sewerage System.
Rice output in Bulacan and Pampanga is “sizeable,” Rudinas said, without citing volumes.
Some farmers may switch to other crops if water flows to regions distant from dams are restricted “under extreme conditions,” Joel Rudinas, acting agriculture undersecretary for operations, said in a phone interview from Manila today. The Philippines has two rice crops a year, with the 2009 first harvest yielding 7.4 million tons.
Imports by the Southeast Asian nation may jump to a record 3 million tons this year, from 1.78 million tons, if El Nino parches crops or another typhoon hits the country, National Food Authority Spokesman Rex Estoperez said in November. The country has so far secured 2.2 million tons from overseas suppliers for delivery this year, he said Jan. 8. The Philippines advanced purchases after storms slashed production in 2009.
“I think they will return to the market only in June when prices have softened,” Rakesh Singh, a trader at Emmsons International Ltd. in New Delhi, said by phone today. “It doesn’t make sense for them to enter the market at this moment because prices are already high,” he said.
El Nino, the weather pattern that can reduce rainfall or prolong the dry season in parts of Asia, also threatens to curb output in Thailand, potentially limiting the capacity of the world’s biggest rice exporter to boost shipments to meet additional demand.
The export price of the 100 percent grade-B Thai white rice, the benchmark in Asia rose 16 percent to $609 a ton in the week of Jan. 13 from last year’s low.
Rice Futures
Rice futures in Chicago rose to a record in April 2008 and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.
Rough rice has jumped 25 percent in Chicago from last year’s low as the Philippines advanced imports after storms wiped out 1.3 million tons of the nation’s crops. The March- delivery contract closed at $13.975 per 100 pounds on Jan. 15. Trading is suspended today for a public holiday.
Acting Philippines Socioeconomic Planning Secretary Augusto Santos said El Nino may cause a “water crisis,” curbing the nation’s agricultural production and hurting the domestic economy, the Manila Times reported today.
Northern Luzon’s Isabela province, the nation’s second- largest rice producer, is most at risk from production losses because of the dry weather, Rudinas said.
Cloud Seeding
El Nino “at its worst” would definitely affect the Philippines rice shortfall, he said. Still, steps such as cloud seeding are being planned to boost water supply in rice areas, he said.
The water level in Angat dam, which supplies 97 percent of water in the capital region dropped 5 percent to 201.43 meters as of Jan. 13 because of El Nino, the Manila Times reported. If the decline continues, water supply from the dam to farms in Bulacan and Pampanga may be cut, the newspaper said, citing the Metropolitan Waterworks and Sewerage System.
Rice output in Bulacan and Pampanga is “sizeable,” Rudinas said, without citing volumes.
Govt to get tough on off-season rice crops
The government is looking at banning off-season rice farming after a campaign to discourage farmers from planting a second or third crop failed to meet its target.
The government wants to limit the amount of rice being grown because of the fear of a looming water crisis.
Irrigation Department chief Chalit Damrongsak said at the weekend irrigation offices had been told to step up their efforts to dissuade farmers from planting a third crop this year.
Many farmers were planting one crop after the other without giving their land the time necessary to recover.
Mr Chalit said his department would support irrigation offices that come up with their own initiatives to discourage over-planting.
One method adopted was the 12th Irrigation Office's helicopter drop of 500,000 leaflets warning farmers of the likelihood of a water shortage.
The office also gave out a gold award worth about 40,000 baht to the farmer who held the leaflet with the same number as the government's winning lottery number. The award was an incentive to farmers to look carefully at the leaflets.
"If the water shortage becomes even worse, the department might have to ban off-season rice farming," Mr Chalit said.
The irrigation chief said water levels in dams and natural sources had fallen sharply. The level in natural water sources was lower than usual this year because only one storm had passed over the country.
The situation is especially worrying in the Chao Phraya River basin, where the water level has fallen markedly. This is because the demand for water has soared in recent years following the increase in rice planting as a result of higher prices.
High prices have convinced farmers to plant a second crop soon after harvesting the first crop, Mr Chalit said.
A second crop is expected to be planted on an estimated 12 million rai this year, but the department only has plans to supply water for 9 million rai.
Mr Chalit said farmers in the central provinces were now planting whenever they wanted, not just during the rainy season.
The shortage of rainwater had seen the water levels in large dams such as Bhumibol and Sirikit to fall to about 70% of capacity. In other smaller dams, the levels have fallen to 50% to 60% of capacity.
Drought is affecting about 30 provinces in the lower North and Northeast.
The Irrigation Department will implement measures to limit water consumption between now and July so there are enough supplies to last the dry season.
The government wants to limit the amount of rice being grown because of the fear of a looming water crisis.
Irrigation Department chief Chalit Damrongsak said at the weekend irrigation offices had been told to step up their efforts to dissuade farmers from planting a third crop this year.
Many farmers were planting one crop after the other without giving their land the time necessary to recover.
Mr Chalit said his department would support irrigation offices that come up with their own initiatives to discourage over-planting.
One method adopted was the 12th Irrigation Office's helicopter drop of 500,000 leaflets warning farmers of the likelihood of a water shortage.
The office also gave out a gold award worth about 40,000 baht to the farmer who held the leaflet with the same number as the government's winning lottery number. The award was an incentive to farmers to look carefully at the leaflets.
"If the water shortage becomes even worse, the department might have to ban off-season rice farming," Mr Chalit said.
The irrigation chief said water levels in dams and natural sources had fallen sharply. The level in natural water sources was lower than usual this year because only one storm had passed over the country.
The situation is especially worrying in the Chao Phraya River basin, where the water level has fallen markedly. This is because the demand for water has soared in recent years following the increase in rice planting as a result of higher prices.
High prices have convinced farmers to plant a second crop soon after harvesting the first crop, Mr Chalit said.
A second crop is expected to be planted on an estimated 12 million rai this year, but the department only has plans to supply water for 9 million rai.
Mr Chalit said farmers in the central provinces were now planting whenever they wanted, not just during the rainy season.
The shortage of rainwater had seen the water levels in large dams such as Bhumibol and Sirikit to fall to about 70% of capacity. In other smaller dams, the levels have fallen to 50% to 60% of capacity.
Drought is affecting about 30 provinces in the lower North and Northeast.
The Irrigation Department will implement measures to limit water consumption between now and July so there are enough supplies to last the dry season.
Sunday 7 February 2010
Drought hits rice harvests in Thailand, Philippines
EL NIÑO threatens to parch rice crops in the Philippines, the world’s biggest importer, and in Thailand, the largest exporter, according to officials in both countries.
“Between 20 and 30 percent of the areas planted to rice in provinces hit by El Niño are at risk of damage due to the dry spell,” Agriculture Undersecretary Emmanuel Paras said.
“That’s why we’re planning measures to counter the effects,” including spending P2 billion.’’
Thailand’s rice output might drop 15 percent to as low as 27 million metric tons in the year that began Oct. 1, from 31.65 million tons a year earlier, Apichart Jongskul, secretary general of the Office, said in Bangkok Thursday.
Lower output in Thailand may limit its capacity to boost shipments to meet additional purchases from importing countries including the Philippines, helping support global prices.
Rice futures rose to a record in April 2008 in Chicago, and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.
While the US Department of Agriculture increased its estimate for this year’s global rice stockpiles, the extra supply was seen coming from India and China, which it did not forecast to increase exports.
“Unfortunately, most of these additional stocks, with the exception of Thailand, will not be available to the market in case prices start to rise,” an economist in Manila said.
“Between 20 and 30 percent of the areas planted to rice in provinces hit by El Niño are at risk of damage due to the dry spell,” Agriculture Undersecretary Emmanuel Paras said.
“That’s why we’re planning measures to counter the effects,” including spending P2 billion.’’
Thailand’s rice output might drop 15 percent to as low as 27 million metric tons in the year that began Oct. 1, from 31.65 million tons a year earlier, Apichart Jongskul, secretary general of the Office, said in Bangkok Thursday.
Lower output in Thailand may limit its capacity to boost shipments to meet additional purchases from importing countries including the Philippines, helping support global prices.
Rice futures rose to a record in April 2008 in Chicago, and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.
While the US Department of Agriculture increased its estimate for this year’s global rice stockpiles, the extra supply was seen coming from India and China, which it did not forecast to increase exports.
“Unfortunately, most of these additional stocks, with the exception of Thailand, will not be available to the market in case prices start to rise,” an economist in Manila said.
Manila to allow private firms to import 163,000 T rice
The Philippines will allow private firms to import 163,000 tons of rice this year, bringing total imports by the world's biggest buyer for 2010 to a new record high of over 2.4 million tons, the state-run food agency said on Friday.
The allocation of the private sector this year, lower than the state grain agency's initial estimate of 200,000 tons, may still be increased depending on their requirements.
"It can be increased depending on the need," said Rex Estoperez, spokesman of the National Food Authority (NFA).
The private sector brought in 200,000 tons rice last year.
The NFA said in a note it has given the allocation to farmers' organisations and other private sector importers, with delivery of the grain scheduled no later than Aug. 15. The country purchased 2.27 million tons of rice from four tenders last year, including re-orders, with bulk of them from Vietnam.
Including the private sector import volume, the Philippines' rice purchases for its 2010 supply would reach 2.44 million tons, exceeding the previous record of 2.3 million tons in 2008, which helped drive grain prices to all-time highs.
NFA has the sole authority to import rice in the country, but it has permitted private firms to bring in the grain since 2002 to curb smuggling.
For this year's allocation, NFA said private importers can source up to 98,000 tons from Thailand, 25,000 tons from China, 25,000 tons from India and 15,000 tons from Australia.
Agriculture Secretary Arthur Yap said on Monday the government had bought enough rice for 2010, suggesting Manila may be out of the market for now.
The allocation of the private sector this year, lower than the state grain agency's initial estimate of 200,000 tons, may still be increased depending on their requirements.
"It can be increased depending on the need," said Rex Estoperez, spokesman of the National Food Authority (NFA).
The private sector brought in 200,000 tons rice last year.
The NFA said in a note it has given the allocation to farmers' organisations and other private sector importers, with delivery of the grain scheduled no later than Aug. 15. The country purchased 2.27 million tons of rice from four tenders last year, including re-orders, with bulk of them from Vietnam.
Including the private sector import volume, the Philippines' rice purchases for its 2010 supply would reach 2.44 million tons, exceeding the previous record of 2.3 million tons in 2008, which helped drive grain prices to all-time highs.
NFA has the sole authority to import rice in the country, but it has permitted private firms to bring in the grain since 2002 to curb smuggling.
For this year's allocation, NFA said private importers can source up to 98,000 tons from Thailand, 25,000 tons from China, 25,000 tons from India and 15,000 tons from Australia.
Agriculture Secretary Arthur Yap said on Monday the government had bought enough rice for 2010, suggesting Manila may be out of the market for now.
Heavy Rain Threatens Indonesia's Rice Harvest, Ministry Warns
The Agriculture Ministry has warned farmers in western Indonesia that higher-than-normal rainfall could put thousands of hectares of rice paddy at risk this rainy season.
Meanwhile, an agricultural analyst doubted the above-average rainfall would cause a shortage in the rice harvest, despite the harvest being delayed a month because of the inclement weather.
Ati Wasiati Hamid, the Ministry of Agriculture’s director of food-crop protection, said on Friday that the heavy rainfall was being caused by the El Nino weather pattern, which caused temperatures in the Indian Ocean to rise.
Areas experiencing higher-than-usual rainfall included Aceh, Lampung, West Sumatra, West Java and some parts of South Kalimantan.
Although rice fields need a lot of water, too much causes the fields to spill over and the crops to die, especially if floods last for longer than two or three days.
The ministry said there were 18,175 hectares of flooded rice paddy nationwide, and about 3,245 hectares of crops have been destroyed.
However, this was still below the five-year average, Ati said. On average, 85,000 hectares of rice fields flood each year, with about 28,000 hectares destroyed.
She said data would not be final until the end of next month — often the period of the heaviest rain s .
The unusually wet weather has resulted in the main harvest being pushed back from April to May, causing an increase in domestic rice prices.
The average price for medium-quality rice on the retail market hit Rp 7,409 (81 cents) per kilogram this week, a 7.4 percent increase since December, according to the Central Statistics Agency (BPS).
Juniman, an economist at PT Bank Internasional Indonesia, said higher rice and sugar prices would result in higher inflation.
“A heavy rainy season significantly affects commodity prices, especially for rice,” he said.
However, the government has indicated it might intervene in the market by selling cheap rice through the State Logistics Agency (Bulog).
“The government has enough rice stocks in Bulog to conduct market operations to control the price,” Juniman said.
Ati called on farmers to quickly report damaged rice crops to local governments, so the governments could provide them with free seeds to replant their fields.
The government has 30,000 tons of rice seed on hand to disburse to farmers to replant crops.
“We are providing enough free seed to farmers,” Ati said. “So if the farmers whose paddy fields are damaged replant their fields immediately, there should be no impact on national rice production.”
Despite the heavy rainfall, the Agriculture Ministry expects farmers to produce 66.6 million tons of rice this year, an increase of 4.45 percent from 2009.
Meanwhile, an agricultural analyst doubted the above-average rainfall would cause a shortage in the rice harvest, despite the harvest being delayed a month because of the inclement weather.
Ati Wasiati Hamid, the Ministry of Agriculture’s director of food-crop protection, said on Friday that the heavy rainfall was being caused by the El Nino weather pattern, which caused temperatures in the Indian Ocean to rise.
Areas experiencing higher-than-usual rainfall included Aceh, Lampung, West Sumatra, West Java and some parts of South Kalimantan.
Although rice fields need a lot of water, too much causes the fields to spill over and the crops to die, especially if floods last for longer than two or three days.
The ministry said there were 18,175 hectares of flooded rice paddy nationwide, and about 3,245 hectares of crops have been destroyed.
However, this was still below the five-year average, Ati said. On average, 85,000 hectares of rice fields flood each year, with about 28,000 hectares destroyed.
She said data would not be final until the end of next month — often the period of the heaviest rain s .
The unusually wet weather has resulted in the main harvest being pushed back from April to May, causing an increase in domestic rice prices.
The average price for medium-quality rice on the retail market hit Rp 7,409 (81 cents) per kilogram this week, a 7.4 percent increase since December, according to the Central Statistics Agency (BPS).
Juniman, an economist at PT Bank Internasional Indonesia, said higher rice and sugar prices would result in higher inflation.
“A heavy rainy season significantly affects commodity prices, especially for rice,” he said.
However, the government has indicated it might intervene in the market by selling cheap rice through the State Logistics Agency (Bulog).
“The government has enough rice stocks in Bulog to conduct market operations to control the price,” Juniman said.
Ati called on farmers to quickly report damaged rice crops to local governments, so the governments could provide them with free seeds to replant their fields.
The government has 30,000 tons of rice seed on hand to disburse to farmers to replant crops.
“We are providing enough free seed to farmers,” Ati said. “So if the farmers whose paddy fields are damaged replant their fields immediately, there should be no impact on national rice production.”
Despite the heavy rainfall, the Agriculture Ministry expects farmers to produce 66.6 million tons of rice this year, an increase of 4.45 percent from 2009.
Friday 5 February 2010
Strong baht could mar rice exports
The baht's appreciation to below 33 to the US dollar will create problems for exporters, in particularly their competitiveness vis เ vis China and Vietnam, according to the Thai Chamber of Commerce and rice exporters.
Phongsak Assakul, vice chairman of the chamber, said exporters should be expecting a better time this year, provided the baht is not too strong.
"The stronger baht is the only negative factor that could hinder export growth this year," he said.
Thai farm-goods exports should increase sharply this year due to high demand in the world market, while industrial orders have recovered - as evidenced by high demand for more labour to serve growth, he said.
The baht has appreciated by 3.4 per cent against the greenback over the past year, while the Chinese yuan weakened by 4 per cent and the Vietnamese dong depreciated by 8.4 per cent last year. Therefore, the dong's value has weakened 12 per cent in relation to the baht, giving its exporters a much sharper competitive edge.
The Vietnamese government is also planning to depreciate the currency by another 5 per cent this year.
Phongsak said the government should closely monitor the baht's movement and ensure it is not much stronger than its main export rivals.
Korbsuk Iamsuree, president of the Thai Rice Exporters Association, said the stronger baht had eaten into exporters' competitiveness.
"The price gap between Thai and Vietnamese rice will be wider following the appreciation of the baht. This will create difficulty for Thai rice exports competing with Vietnam," she said.
Vietnamese rice is currently quoted at US$100-$150 (Bt3,284-Bt4,926) a tonne lower than Thai rice.
Korbsuk added that the association expects Thailand to export 9 million-9.5 million tonnes of rice this year. However, if the government releases more of its stockpile under government-to-government contracts, the volume could reach 10 million tonnes.
The baht was trading at 32.84 per dollar late yesterday afternoon.
Phongsak Assakul, vice chairman of the chamber, said exporters should be expecting a better time this year, provided the baht is not too strong.
"The stronger baht is the only negative factor that could hinder export growth this year," he said.
Thai farm-goods exports should increase sharply this year due to high demand in the world market, while industrial orders have recovered - as evidenced by high demand for more labour to serve growth, he said.
The baht has appreciated by 3.4 per cent against the greenback over the past year, while the Chinese yuan weakened by 4 per cent and the Vietnamese dong depreciated by 8.4 per cent last year. Therefore, the dong's value has weakened 12 per cent in relation to the baht, giving its exporters a much sharper competitive edge.
The Vietnamese government is also planning to depreciate the currency by another 5 per cent this year.
Phongsak said the government should closely monitor the baht's movement and ensure it is not much stronger than its main export rivals.
Korbsuk Iamsuree, president of the Thai Rice Exporters Association, said the stronger baht had eaten into exporters' competitiveness.
"The price gap between Thai and Vietnamese rice will be wider following the appreciation of the baht. This will create difficulty for Thai rice exports competing with Vietnam," she said.
Vietnamese rice is currently quoted at US$100-$150 (Bt3,284-Bt4,926) a tonne lower than Thai rice.
Korbsuk added that the association expects Thailand to export 9 million-9.5 million tonnes of rice this year. However, if the government releases more of its stockpile under government-to-government contracts, the volume could reach 10 million tonnes.
The baht was trading at 32.84 per dollar late yesterday afternoon.
Is The World Set for Another Rice Crisis?
"This year, I will not have enough rice to eat for the whole year," says Kong Chanthorn, a rice farmer in Srayov Kharng Tbong village in Cambodia's Kompong Thom province. "I am afraid I cannot earn the money to buy rice to support my families because this year its price is too high."
Chanthorn is not alone. The global price of rice, a staple for half the world's population, is rising inexorably again, up more than 25 percent in recent months, stoked by Philippine and Indian import demand although not to the stratospheric levels of late 2007 and early 2008. At that time the price rose from about US$300 per metric ton to as much as US$1,100. Prices later fell back to about US$400 as government panic subsided across the region and bans on export were lifted, and as planting pushed up stocks.
Cambodia's rising prices were precipitated by the onset last September of Typhoon Ketsana. On Wednesday Pov Samy, the secretary general of Cambodia's National Committee for Disaster Management, said Ketsana had caused flooding in eight of the country's 24 provinces and damaged public and private buildings to the tune of US$153 million. A further US$131 million is needed to restore the buildings' hardware, he said.
But the cost to rice farmers suffering lower production yields and higher food prices remains unknown, not only in Cambodia but in other areas of Asia as well. The damage from the typhoon, plus the potential of falling stocks from a recurrence of the El Nino weather phenomenon, raises the risk of skyrocketing prices.
Chanthon, 33, says he lost half the annual yield from his rice paddy from Ketsana. And although villagers in his area have received seeds and food help from non-governmental organizations, they have not been enough. "Some villagers have to catch fish to earn some money to buy milled rice," he said. "My daughter's rice field is all gone and my son-in-law has had to fish."
"Flooding from Ketsana has pushed the price of rice up in our community," Chanthorn. "Last year during the same period rice only cost 9000 riel [$1.75] for a basket. Now the price is near 13,000 riel [$2.10]."
Food security has become a major political issue in Asia in recent years due to imbalances in the demand-supply chain and hoarding by national governments. In response to the problems, the World Food Program has initiated a number of emergency projects, and the International Rice Research Institute (IRRI) last month launched a US$300 million fund-raising campaign for the region.
"Rice is fundamental not just to Asian economies but also Asian culture," IRRI Director General Dr Robert Zeigler said in a statement at the launch of the fund. "There is no doubt that rice research can help. For four decades, rice production has steadily increased in Asia, pushed ahead by new varieties developed through research that has helped ensure enough rice for all Asians.
"What we need more than anything is to make the necessary investments, especially with the looming threat of climate change," he added. "After all, in Asia, rice is life."
New statistics released by HSBC show that rice production could fall 20 percent this season due to a rage of mainly weather-related factors such as typhoons, flooding and droughts. As a result, global rice prices have surged to US$610 per metric ton. Along with the anticipated return of El Nino in 2010, the drop in yield could spell trouble for a region increasingly important to world economic growth although there is some debate over stocks.
Typhoon Ondoy, as Ketsana was known in the Philippines, severely damaged Filipino rice production, resulting in record buys of 202 million tons to build adequate stockpiles for 2010. Reuters reported on Jan. 13 that Philippines unmilled rice output is expected to hit a record this year, however, and that the El Nino effect expected to be mild. Bloomberg, however, quoted Philippine Agriculture Undersecretary Emmanuel Paras as saying as much as 20 to 20 percent of the country's rice growing regions could be affected by the weather phenomenon.
Some 1.5 million people affected by food shortages are beneficiaries of a $56 million WFP project in the Philippines. Running through June 2010, the program will attempt to trigger recovery through agricultural projects and support. However, the Philippines program is facing a funding shortfall of $33 million. Further emergency donations are needed in Cambodia, where 25,000 households received 1,250 tons of rice for the month of September to avoid starvation, but have been left to fend for themselves since.
"Food assistance provided by [UN programs] during crises is aimed at saving lives and ensuring people do not exhaust their meager resources to survive the ordeal," said Mike Huggins, WFP spokesperson for Asia. "By supporting people during tough times, they are better able to recover their livelihoods and get back on their feet when conditions improve."
In his December report for HSBC, "What's Cooking with Rice?," economist Frederic Neumann noted that the US Department of Agriculture (USDA) forecasts that global rice production in 2010 will be below global demand for the first time in five years. At the same time, stocks among major exporters are running about 20 percent below normal, he said — adding that the numbers may even underestimate the problem.
In 2008, continually low stocks and steadily growing demand "set up the market for a price spike that ultimately became self-perpetuating," Neumann wrote. "In a major review of the episode, the USDA recently concluded that hoarding and emergency trade restrictions imposed by governments were the main driver for the run-up in rice prices."
None of these underlying agricultural problems have disappeared in the past year. Following its driest monsoon season for 37 years, the Indian government is expecting its summer-sown rice output to fall by some 18 percent, forcing it to become a net importer for the first time in nearly two decades in order to cope, the USDA said.
"Rising rice prices should generally be positive for rice farmers across the region as it raises their income," Neumann said in an email exchange. "However, lower income groups tend to be more negatively affected. In a sense, therefore, rising rice prices represent a redistribution of income."
After two devastating typhoons and some of the heaviest rains in almost 40 years, the Philippines is also suffering massive production shortages that are expected to increase the country's import demand by 25 percent. The government was forced to revise up its emergency operations budget to provide for an additional 44,628 metric tons of food aid and extend the emergency operations plan through June of 2010.
The problem of food security and pricing is expected to increase hoarding by individual countries that could put at risk the consumption driven economic recovery of the region. This would exacerbate an already precarious situation for developing countries weathering the global economic recession.
Chanthorn is not alone. The global price of rice, a staple for half the world's population, is rising inexorably again, up more than 25 percent in recent months, stoked by Philippine and Indian import demand although not to the stratospheric levels of late 2007 and early 2008. At that time the price rose from about US$300 per metric ton to as much as US$1,100. Prices later fell back to about US$400 as government panic subsided across the region and bans on export were lifted, and as planting pushed up stocks.
Cambodia's rising prices were precipitated by the onset last September of Typhoon Ketsana. On Wednesday Pov Samy, the secretary general of Cambodia's National Committee for Disaster Management, said Ketsana had caused flooding in eight of the country's 24 provinces and damaged public and private buildings to the tune of US$153 million. A further US$131 million is needed to restore the buildings' hardware, he said.
But the cost to rice farmers suffering lower production yields and higher food prices remains unknown, not only in Cambodia but in other areas of Asia as well. The damage from the typhoon, plus the potential of falling stocks from a recurrence of the El Nino weather phenomenon, raises the risk of skyrocketing prices.
Chanthon, 33, says he lost half the annual yield from his rice paddy from Ketsana. And although villagers in his area have received seeds and food help from non-governmental organizations, they have not been enough. "Some villagers have to catch fish to earn some money to buy milled rice," he said. "My daughter's rice field is all gone and my son-in-law has had to fish."
"Flooding from Ketsana has pushed the price of rice up in our community," Chanthorn. "Last year during the same period rice only cost 9000 riel [$1.75] for a basket. Now the price is near 13,000 riel [$2.10]."
Food security has become a major political issue in Asia in recent years due to imbalances in the demand-supply chain and hoarding by national governments. In response to the problems, the World Food Program has initiated a number of emergency projects, and the International Rice Research Institute (IRRI) last month launched a US$300 million fund-raising campaign for the region.
"Rice is fundamental not just to Asian economies but also Asian culture," IRRI Director General Dr Robert Zeigler said in a statement at the launch of the fund. "There is no doubt that rice research can help. For four decades, rice production has steadily increased in Asia, pushed ahead by new varieties developed through research that has helped ensure enough rice for all Asians.
"What we need more than anything is to make the necessary investments, especially with the looming threat of climate change," he added. "After all, in Asia, rice is life."
New statistics released by HSBC show that rice production could fall 20 percent this season due to a rage of mainly weather-related factors such as typhoons, flooding and droughts. As a result, global rice prices have surged to US$610 per metric ton. Along with the anticipated return of El Nino in 2010, the drop in yield could spell trouble for a region increasingly important to world economic growth although there is some debate over stocks.
Typhoon Ondoy, as Ketsana was known in the Philippines, severely damaged Filipino rice production, resulting in record buys of 202 million tons to build adequate stockpiles for 2010. Reuters reported on Jan. 13 that Philippines unmilled rice output is expected to hit a record this year, however, and that the El Nino effect expected to be mild. Bloomberg, however, quoted Philippine Agriculture Undersecretary Emmanuel Paras as saying as much as 20 to 20 percent of the country's rice growing regions could be affected by the weather phenomenon.
Some 1.5 million people affected by food shortages are beneficiaries of a $56 million WFP project in the Philippines. Running through June 2010, the program will attempt to trigger recovery through agricultural projects and support. However, the Philippines program is facing a funding shortfall of $33 million. Further emergency donations are needed in Cambodia, where 25,000 households received 1,250 tons of rice for the month of September to avoid starvation, but have been left to fend for themselves since.
"Food assistance provided by [UN programs] during crises is aimed at saving lives and ensuring people do not exhaust their meager resources to survive the ordeal," said Mike Huggins, WFP spokesperson for Asia. "By supporting people during tough times, they are better able to recover their livelihoods and get back on their feet when conditions improve."
In his December report for HSBC, "What's Cooking with Rice?," economist Frederic Neumann noted that the US Department of Agriculture (USDA) forecasts that global rice production in 2010 will be below global demand for the first time in five years. At the same time, stocks among major exporters are running about 20 percent below normal, he said — adding that the numbers may even underestimate the problem.
In 2008, continually low stocks and steadily growing demand "set up the market for a price spike that ultimately became self-perpetuating," Neumann wrote. "In a major review of the episode, the USDA recently concluded that hoarding and emergency trade restrictions imposed by governments were the main driver for the run-up in rice prices."
None of these underlying agricultural problems have disappeared in the past year. Following its driest monsoon season for 37 years, the Indian government is expecting its summer-sown rice output to fall by some 18 percent, forcing it to become a net importer for the first time in nearly two decades in order to cope, the USDA said.
"Rising rice prices should generally be positive for rice farmers across the region as it raises their income," Neumann said in an email exchange. "However, lower income groups tend to be more negatively affected. In a sense, therefore, rising rice prices represent a redistribution of income."
After two devastating typhoons and some of the heaviest rains in almost 40 years, the Philippines is also suffering massive production shortages that are expected to increase the country's import demand by 25 percent. The government was forced to revise up its emergency operations budget to provide for an additional 44,628 metric tons of food aid and extend the emergency operations plan through June of 2010.
The problem of food security and pricing is expected to increase hoarding by individual countries that could put at risk the consumption driven economic recovery of the region. This would exacerbate an already precarious situation for developing countries weathering the global economic recession.
El Nino May Curb Thailand, Philippine Rice Output
El Nino threatens to parch rice crops in the Philippines, the world’s biggest importer, and in Thailand, according to officials in both countries.
“Between 20 to 30 percent of the areas planted to rice in provinces hit by El Nino are at risk of damage due to the dry spell,” Philippine Agriculture Undersecretary Emmanuel Paras said in a phone interview from Manila today. “That’s why we’re planning measures to counter the effects,” including 2 billion pesos ($43.7 million) of spending, he said.
Thailand’s output of unmilled rice may drop 15 percent to as low as 27 million metric tons in the year that began Oct. 1, from 31.65 million tons a year earlier, Apichart Jongskul, secretary general of the Office, said in an interview in Bangkok yesterday.
Lower output in Thailand may limit its capacity to boost shipments to meet additional purchases from importing countries including the Philippines, helping support global prices.
If the Thai government decides to hold on to its 6 million ton stockpile, “we could see a supply shortage,” said Kiattisak Kanlayasirivat, director of Novel Commodities in Thailand, which trades about $600 million worth of rice a year.
Rice futures rose to a record in April 2008 in Chicago and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.
Price Jump
The export price of the 100 percent grade-B Thai white rice, the benchmark in Asia, rose 16 percent to $607 a ton in the week of Jan. 13, from last year’s low. Rough rice futures are up 26 percent to $14.10 per 100 pounds in Chicago from last year’s low.
Importers will have to rely on exports from Thailand, the biggest shipper, after cheaper supplies from Myanmar and Pakistan dry up at the beginning of March, Rakesh Singh, a rice trader at New Delhi-based Emmsons International Ltd. said today.
Vietnam, the second-largest rice exporter “is already sold out for this crop because whatever they have, they have committed to the Philippines,” he said.
While the U.S. Department of Agriculture increased its estimate for this year’s global rice stockpiles by 1.2 million tons from a month earlier to 90.66 million tons on Jan. 12, the additional supply was seen coming from India and China, which were not forecast by the USDA to increase exports.
Philippine Provinces
“Unfortunately, most of these additional stocks, with the exception of Thailand, will not be available to the market in case prices start to rise,” Samarendu Mohanty, a senior economist at the International Rice Research Institute in Los Banos, Philippines, said in a report sent to Bloomberg News by e-mail on Jan. 10, before the USDA released new estimates.
Twenty Philippine provinces, including Nueva Ecija, Bulacan, Pampanga and Sultan Kudarat, received between 20 percent to 59 percent below-normal rainfall in the past three months, Daisy Ortega, senior weather specialist at the Philippine Atmospheric Geophysical and Astronomical Services Administration said in an interview Jan. 8.
Nueva Ecija, the largest rice producing province, Pampanga and Bulacan are located in Central Luzon which accounted for 18 percent of the national output in 2008, according to the Bureau of Agricultural Statistics Web site.
El Nino may cause water supply shortages, hurting rice planting in Thailand March through May, Apichart said. Output may further drop as insect infestation spread to other rice areas, he said.
The reduction in Thailand’s output “is quite a lot,” Chookiat Ophaswongse, adviser to the Thai Rice Exporters Association, said by phone from Bangkok today. “It will drive prices significantly higher.”
Higher stockpiles in Thailand will allow the exporter to meet its sales forecast of 10 million tons this year and keep domestic supplies stable, the government’s Apichart said.
“Until something goes drastically wrong somewhere,” prices should hold, Emmsons’ Singh said.
“Between 20 to 30 percent of the areas planted to rice in provinces hit by El Nino are at risk of damage due to the dry spell,” Philippine Agriculture Undersecretary Emmanuel Paras said in a phone interview from Manila today. “That’s why we’re planning measures to counter the effects,” including 2 billion pesos ($43.7 million) of spending, he said.
Thailand’s output of unmilled rice may drop 15 percent to as low as 27 million metric tons in the year that began Oct. 1, from 31.65 million tons a year earlier, Apichart Jongskul, secretary general of the Office, said in an interview in Bangkok yesterday.
Lower output in Thailand may limit its capacity to boost shipments to meet additional purchases from importing countries including the Philippines, helping support global prices.
If the Thai government decides to hold on to its 6 million ton stockpile, “we could see a supply shortage,” said Kiattisak Kanlayasirivat, director of Novel Commodities in Thailand, which trades about $600 million worth of rice a year.
Rice futures rose to a record in April 2008 in Chicago and the Asian benchmark export price reached its highest level a month later as the Philippines boosted imports and exporters including India and Vietnam curbed shipments, adding to concerns of food shortages that sparked protests from Haiti to Egypt.
Price Jump
The export price of the 100 percent grade-B Thai white rice, the benchmark in Asia, rose 16 percent to $607 a ton in the week of Jan. 13, from last year’s low. Rough rice futures are up 26 percent to $14.10 per 100 pounds in Chicago from last year’s low.
Importers will have to rely on exports from Thailand, the biggest shipper, after cheaper supplies from Myanmar and Pakistan dry up at the beginning of March, Rakesh Singh, a rice trader at New Delhi-based Emmsons International Ltd. said today.
Vietnam, the second-largest rice exporter “is already sold out for this crop because whatever they have, they have committed to the Philippines,” he said.
While the U.S. Department of Agriculture increased its estimate for this year’s global rice stockpiles by 1.2 million tons from a month earlier to 90.66 million tons on Jan. 12, the additional supply was seen coming from India and China, which were not forecast by the USDA to increase exports.
Philippine Provinces
“Unfortunately, most of these additional stocks, with the exception of Thailand, will not be available to the market in case prices start to rise,” Samarendu Mohanty, a senior economist at the International Rice Research Institute in Los Banos, Philippines, said in a report sent to Bloomberg News by e-mail on Jan. 10, before the USDA released new estimates.
Twenty Philippine provinces, including Nueva Ecija, Bulacan, Pampanga and Sultan Kudarat, received between 20 percent to 59 percent below-normal rainfall in the past three months, Daisy Ortega, senior weather specialist at the Philippine Atmospheric Geophysical and Astronomical Services Administration said in an interview Jan. 8.
Nueva Ecija, the largest rice producing province, Pampanga and Bulacan are located in Central Luzon which accounted for 18 percent of the national output in 2008, according to the Bureau of Agricultural Statistics Web site.
El Nino may cause water supply shortages, hurting rice planting in Thailand March through May, Apichart said. Output may further drop as insect infestation spread to other rice areas, he said.
The reduction in Thailand’s output “is quite a lot,” Chookiat Ophaswongse, adviser to the Thai Rice Exporters Association, said by phone from Bangkok today. “It will drive prices significantly higher.”
Higher stockpiles in Thailand will allow the exporter to meet its sales forecast of 10 million tons this year and keep domestic supplies stable, the government’s Apichart said.
“Until something goes drastically wrong somewhere,” prices should hold, Emmsons’ Singh said.
NFA allows private firms to import rice
The National Food Authority (NFA) has allowed the private sector to import 163,000 metric tons (MT) of rice.
In a memorandum circular, the NFA said all rice-based farmers organizations, other sectors and even individuals can import 98,000 MT of rice from Thailand; 25,000 MT from China; 25,000 MT from India; and 15,000 MT from Australia. The circular, however, did not specify the bidding date.
The NFA prefers that the imported rice be fortified with iron and that it should arrive in the country by August 31.
The NFA said those intending to import rice should first secure an import license from the grains agency.
The license will expire by the end of the year.
This rice import allocation for the private sector would bring total imports for 2010 to over 2.3 million MT, the same volume the country imported in 2008.
Agriculture Secretary Arthur C. Yap said the country had purchased enough rice from the global market to supply 2010 requirements.
Excluding the private sector allocation, total rice imports for 2010 have already reached about 2.2 million MT.
“That volume is already comfortable for the year,” Yap had said. The private sector imports would add to reserves.
In a memorandum circular, the NFA said all rice-based farmers organizations, other sectors and even individuals can import 98,000 MT of rice from Thailand; 25,000 MT from China; 25,000 MT from India; and 15,000 MT from Australia. The circular, however, did not specify the bidding date.
The NFA prefers that the imported rice be fortified with iron and that it should arrive in the country by August 31.
The NFA said those intending to import rice should first secure an import license from the grains agency.
The license will expire by the end of the year.
This rice import allocation for the private sector would bring total imports for 2010 to over 2.3 million MT, the same volume the country imported in 2008.
Agriculture Secretary Arthur C. Yap said the country had purchased enough rice from the global market to supply 2010 requirements.
Excluding the private sector allocation, total rice imports for 2010 have already reached about 2.2 million MT.
“That volume is already comfortable for the year,” Yap had said. The private sector imports would add to reserves.
Wednesday 3 February 2010
Rice prices fall as traders delay buying from farmers
The Commerce Ministry is expected to announce tomorrow the release of 300,000 tonnes of government rice for bidding.
A trader source said yesterday that the prospect of a large |volume of government rice entering the market had caused prices to fall dramatically in the past few days.
"Although there is high demand for rice in the world market, |the government's plan to release part of its stockpiles has caused price weakening," the source |said.
The government has about 6 million tonnes of rice stored.
Yesterday, 5-per-cent white rice was quoted at Bt16,800-Bt17,000 a tonne, down from Bt17,500-Bt17,800 last week, while 100-per-cent white rice was traded at Bt20,500, dropping from Bt22,000. Husked rice was selling for Bt12,000-Bt12,200, falling from Bt13,000.
"Rice exporters have delayed buying from millers as they want to see the price come down. Although prices should be rising, following high demand in the market, exporters' strategy to delay buying rice at present has caused the price to decline," the source said.
The source also said the upcoming sale of government rice could pave the way for corruption.
The ministry is planning to sell rice at Bt16,000 a tonne to traders. It has also offered traders to pay tea money of Bt500 a tonne if they want to secure some of that cheap rice, the source claimed.
"If the government decides |to sell rice at only Bt16,000 a tonne, it would face a loss of Bt6,000 a tonne, as its production cost is Bt22,000 a tonne," the source said.
The ministry's plan is to sell about 600,000 tonnes this month, which means it would suffer an immediate loss of Bt3.6 billion if the price were Bt16,000.
The source said an unscrupulous staff member who works close to Commerce Minister Porntiva Nakasai might be involved with the case.
To prevent a severe drop in rice prices, the ministry should delay sales to next month, the source said, adding, "It would be better if the government released its huge rice stockpiles at the end of the harvest season to ensure stable prices."
If the government sells rice, holding an auction is the last choice, as it would upset the market, the source said.
It should instead concentrate on seeking government-to-government deals, as that would not drive the market price lower.
A trader source said yesterday that the prospect of a large |volume of government rice entering the market had caused prices to fall dramatically in the past few days.
"Although there is high demand for rice in the world market, |the government's plan to release part of its stockpiles has caused price weakening," the source |said.
The government has about 6 million tonnes of rice stored.
Yesterday, 5-per-cent white rice was quoted at Bt16,800-Bt17,000 a tonne, down from Bt17,500-Bt17,800 last week, while 100-per-cent white rice was traded at Bt20,500, dropping from Bt22,000. Husked rice was selling for Bt12,000-Bt12,200, falling from Bt13,000.
"Rice exporters have delayed buying from millers as they want to see the price come down. Although prices should be rising, following high demand in the market, exporters' strategy to delay buying rice at present has caused the price to decline," the source said.
The source also said the upcoming sale of government rice could pave the way for corruption.
The ministry is planning to sell rice at Bt16,000 a tonne to traders. It has also offered traders to pay tea money of Bt500 a tonne if they want to secure some of that cheap rice, the source claimed.
"If the government decides |to sell rice at only Bt16,000 a tonne, it would face a loss of Bt6,000 a tonne, as its production cost is Bt22,000 a tonne," the source said.
The ministry's plan is to sell about 600,000 tonnes this month, which means it would suffer an immediate loss of Bt3.6 billion if the price were Bt16,000.
The source said an unscrupulous staff member who works close to Commerce Minister Porntiva Nakasai might be involved with the case.
To prevent a severe drop in rice prices, the ministry should delay sales to next month, the source said, adding, "It would be better if the government released its huge rice stockpiles at the end of the harvest season to ensure stable prices."
If the government sells rice, holding an auction is the last choice, as it would upset the market, the source said.
It should instead concentrate on seeking government-to-government deals, as that would not drive the market price lower.
Commerce Ministry to Sell 300,000 tons of Rice from Govt's Stock
The commerce minister has announced the sale of 300,000 tons from the government rice stock.
Rice sellers are complaining that rice prices have dropped by 700 to 800 baht per ton in the two days since the announcement.
Commerce Minister Porntiva Nakasai is calling for a meeting on January 14 to discuss the sale of 300,000 tons of rice from the 6-million ton in the government stock as proposed by the Commerce Ministry's committee on rice policy.
According to the rice sellers, rice prices in the domestic market significantly decreased after the government announced the sale. On January 11 and 12, rice prices dropped by 700 to 800 baht per ton.
The price of 5 percent white rice has been lowered to between 16,800 and 17,000 baht per ton, a decrease from a price range of 17,500 to 17,800 baht per ton.
The price of 100 per cent white rice has dropped to 20,500 from 22,000 baht per ton, and the price of rice grist has decreased to between 12,000 and 12,200 baht per ton, from 13,000 baht per ton.
There has also been a rumor that the government is planning to sell 600,000 tons of rice from the stock for only 16,000 baht per ton, and that the rice-buyers are bribing the officials who authorize the sale at 500 baht per ton of rice sold.
As a result, many are closely monitoring the transactions.
Some have raised suspicion that the government is selling the rice for cheap in an effort to secure votes in preparation for the upcoming parliamentary censure debate.
It has not been confirmed whether or not the coalition parties are putting their support behind the sale of rice. In the past, there have been many attempts to block the sale of agricultural products in the government stock.
The government is planning to release the rice in the stock by the end of January, which is earlier than what many have predicted.
Many have anticipated that the government will start selling the rice by the end of February, to coincide with the end of the price-guarantee scheme.
Meanwhile, the International Rice Research Institute believes global rice prices will remain stable at around 600 U.S. dollars per ton.
The institute also predicts that droughts and floods in the near future will damage rice production in India and the Philippines.
As a result, they expect rice prices will never again be lower than 300 U.S. dollars.
Rice sellers are complaining that rice prices have dropped by 700 to 800 baht per ton in the two days since the announcement.
Commerce Minister Porntiva Nakasai is calling for a meeting on January 14 to discuss the sale of 300,000 tons of rice from the 6-million ton in the government stock as proposed by the Commerce Ministry's committee on rice policy.
According to the rice sellers, rice prices in the domestic market significantly decreased after the government announced the sale. On January 11 and 12, rice prices dropped by 700 to 800 baht per ton.
The price of 5 percent white rice has been lowered to between 16,800 and 17,000 baht per ton, a decrease from a price range of 17,500 to 17,800 baht per ton.
The price of 100 per cent white rice has dropped to 20,500 from 22,000 baht per ton, and the price of rice grist has decreased to between 12,000 and 12,200 baht per ton, from 13,000 baht per ton.
There has also been a rumor that the government is planning to sell 600,000 tons of rice from the stock for only 16,000 baht per ton, and that the rice-buyers are bribing the officials who authorize the sale at 500 baht per ton of rice sold.
As a result, many are closely monitoring the transactions.
Some have raised suspicion that the government is selling the rice for cheap in an effort to secure votes in preparation for the upcoming parliamentary censure debate.
It has not been confirmed whether or not the coalition parties are putting their support behind the sale of rice. In the past, there have been many attempts to block the sale of agricultural products in the government stock.
The government is planning to release the rice in the stock by the end of January, which is earlier than what many have predicted.
Many have anticipated that the government will start selling the rice by the end of February, to coincide with the end of the price-guarantee scheme.
Meanwhile, the International Rice Research Institute believes global rice prices will remain stable at around 600 U.S. dollars per ton.
The institute also predicts that droughts and floods in the near future will damage rice production in India and the Philippines.
As a result, they expect rice prices will never again be lower than 300 U.S. dollars.
Thailand’s 2010 rice shipments may match record -- export chief
Thailand’s rice exports this year may match the record 10 million tons seen in 2008 when global commodity prices surged, the head of the exporters’ association said on Monday, forecasting firm prices due to strong demand.
"If the government manages its stocks well, I think we could export a record 10 million tons this year," Thai Rice Exporters Association President Chookiat Ophaswongse said, referring to the estimated 6 million tons of milled rice held by the government.
"Our conservative forecast is 9 million tons," he added in an interview with Reuters.
Thai rice, a benchmark for the region, is seeing a resurgence in demand as economic recovery spreads across Asia.
Prices jumped around 15% from $550 per ton in January to $630 per ton in December on strong demand, largely from the Philippines, where damage from typhoons hurt production.
After a bumper 2008, Thai rice exports dropped to 8.57 million tons in 2009 as buyers switched to lower-priced rice from Vietnam, the second biggest exporter.
But Thailand will probably recoup market share this year from Vietnam, whose production was unlikely to meet rising world demand because of obligations to its traditional buyer, the Philippines.
The Philippines, the world’s biggest rice importer, held three tenders to buy 600,000 tons of rice in each in December with Vietnam awarded large portions.
"That could be a good opportunity for Thailand to sell more white rice this year as Vietnam will be busy loading rice for Manila," Mr. Chookiat said.
He said parboiled rice sales, especially from African countries, were likely to support overall Thai exports this year, with India expected to keep a rice export ban in place to secure domestic food security after production was cut by poor monsoons.
"Demand from Africa should remain strong this year and we are the only parboiled rice supplier after India banned exports," he said, adding that sales of parboiled rice reached around 50% of total exports in 2009.
India, a major parboiled rice exporter, halted exports from late 2007. That triggered fears about food scarcity and pushed Thailand’s benchmark 100% B grade white rice to a record high of $1,080 per ton in April 2008.
Mr. Chookiat said he expected Thai prices to remain firm this year, without getting anywhere near that record high.
"I think average Thai export prices could move in a range of $550-$650 per ton this year," he said.
"If the government manages its stocks well, I think we could export a record 10 million tons this year," Thai Rice Exporters Association President Chookiat Ophaswongse said, referring to the estimated 6 million tons of milled rice held by the government.
"Our conservative forecast is 9 million tons," he added in an interview with Reuters.
Thai rice, a benchmark for the region, is seeing a resurgence in demand as economic recovery spreads across Asia.
Prices jumped around 15% from $550 per ton in January to $630 per ton in December on strong demand, largely from the Philippines, where damage from typhoons hurt production.
After a bumper 2008, Thai rice exports dropped to 8.57 million tons in 2009 as buyers switched to lower-priced rice from Vietnam, the second biggest exporter.
But Thailand will probably recoup market share this year from Vietnam, whose production was unlikely to meet rising world demand because of obligations to its traditional buyer, the Philippines.
The Philippines, the world’s biggest rice importer, held three tenders to buy 600,000 tons of rice in each in December with Vietnam awarded large portions.
"That could be a good opportunity for Thailand to sell more white rice this year as Vietnam will be busy loading rice for Manila," Mr. Chookiat said.
He said parboiled rice sales, especially from African countries, were likely to support overall Thai exports this year, with India expected to keep a rice export ban in place to secure domestic food security after production was cut by poor monsoons.
"Demand from Africa should remain strong this year and we are the only parboiled rice supplier after India banned exports," he said, adding that sales of parboiled rice reached around 50% of total exports in 2009.
India, a major parboiled rice exporter, halted exports from late 2007. That triggered fears about food scarcity and pushed Thailand’s benchmark 100% B grade white rice to a record high of $1,080 per ton in April 2008.
Mr. Chookiat said he expected Thai prices to remain firm this year, without getting anywhere near that record high.
"I think average Thai export prices could move in a range of $550-$650 per ton this year," he said.
Thai Rice, Sugar, Rubber Output May Fall on El Nino
Thailand, a key exporter of rice, rubber and sugar, may miss production forecasts for the three commodities this year because of dry weather caused by El Nino weather event, the Office of Agricultural Economics said.
“El Nino is likely to have a severe impact on agricultural production,” Apichart Jongskul, secretary general of the Office, said in an interview in Bangkok today.
Thailand, the world’s top rice exporter, may produce 27 million to 29 million metric tons in the crop year started Oct. 1, compared with 31.65 million tons in the previous year, he said. Sugar output may total 7.3 million tons, less than 7.6 million tons forecast previously, and production of rubber may be 3.1 million tons, compared with 3.33 million tons estimated earlier, Apichart said.
Still, “the decline in production won’t have a significant impact on domestic and export markets,” he said. “Supplies will be adequate.”
Sales of sugar from Thailand, the second-biggest supplier, may rise to 5.52 million tons from 5.30 million tons in 2009, he said. Exports of rubber may rise to 2.85 million tons from 2.7 million tons, while rice sales may be 10 million tons from 8.57 million last year, Apichart said.
El Nino, the weather pattern that creates a warming of the Pacific Ocean, can reduce rainfall or prolong the dry season in parts of Asia, damaging agricultural output.
“El Nino is likely to have a severe impact on agricultural production,” Apichart Jongskul, secretary general of the Office, said in an interview in Bangkok today.
Thailand, the world’s top rice exporter, may produce 27 million to 29 million metric tons in the crop year started Oct. 1, compared with 31.65 million tons in the previous year, he said. Sugar output may total 7.3 million tons, less than 7.6 million tons forecast previously, and production of rubber may be 3.1 million tons, compared with 3.33 million tons estimated earlier, Apichart said.
Still, “the decline in production won’t have a significant impact on domestic and export markets,” he said. “Supplies will be adequate.”
Sales of sugar from Thailand, the second-biggest supplier, may rise to 5.52 million tons from 5.30 million tons in 2009, he said. Exports of rubber may rise to 2.85 million tons from 2.7 million tons, while rice sales may be 10 million tons from 8.57 million last year, Apichart said.
El Nino, the weather pattern that creates a warming of the Pacific Ocean, can reduce rainfall or prolong the dry season in parts of Asia, damaging agricultural output.
Philippines sees 2010 paddy rice output recovering
The Philippines' unmilled rice output is likely to increase to at least 17.4 million tons in 2010, a senior agriculture official said on Wednesday, from a projected 16.4 million tons last year.
But actual rice output may go up to more than 18 million tons if the government approves a higher 2010 budget, Frisco Malabanan, program director for rice at the Department of Agriculture, told reporters.
But actual rice output may go up to more than 18 million tons if the government approves a higher 2010 budget, Frisco Malabanan, program director for rice at the Department of Agriculture, told reporters.
Iraq purchases U.S.-grown rice
The USA Rice Federation reports that Iraq recently purchased 100,000 metric tons of U.S. long-grain rice in its latest tender.
Historically, Iraq has been a sporadic but rather large market for U.S. rice. From a high of 385,000 metric tons in 2005-06 to 121,000 metric tons last marketing year, this 100,000 metric tons sale, said USA Rice, “demonstrates that this is a market that must be taken seriously.”
USA Rice is building relationships with the Iraqi Grain Board and the Ministry of Trade.
Almost all the imported rice is distributed through a ration system administered by the Iraqi government and all purchase decisions are made by the government.
Due to the security situation, USA Rice does not have an active promotions program in Iraq.
The U.S. Embassy in Baghdad plans to take a contingent of Iraqis to the Gulfood Show in Dubai, United Arab Emirates on Feb. 21-24. USA Rice is exhibiting at the event and “will interact with the members of the U.S. Embassy-sponsored team to promote more purchases of U.S.-grown rice.”
Historically, Iraq has been a sporadic but rather large market for U.S. rice. From a high of 385,000 metric tons in 2005-06 to 121,000 metric tons last marketing year, this 100,000 metric tons sale, said USA Rice, “demonstrates that this is a market that must be taken seriously.”
USA Rice is building relationships with the Iraqi Grain Board and the Ministry of Trade.
Almost all the imported rice is distributed through a ration system administered by the Iraqi government and all purchase decisions are made by the government.
Due to the security situation, USA Rice does not have an active promotions program in Iraq.
The U.S. Embassy in Baghdad plans to take a contingent of Iraqis to the Gulfood Show in Dubai, United Arab Emirates on Feb. 21-24. USA Rice is exhibiting at the event and “will interact with the members of the U.S. Embassy-sponsored team to promote more purchases of U.S.-grown rice.”
Tuesday 2 February 2010
Rice flare-up delays Asean hopes for tariff-free trade area
South-east Asia's hopes of completing its emerging tariff-free trade area were dealt a blow yesterday by a flare-up in long-standing tensions over rice between Thailand and the Philippines.
Six members of the 10-country Association of South-East Asian Nations achieved tariff-free trade for 99.1 per cent of goods from January 1, with the remaining four due to achieve zero tariffs by 2015.
Asean, which has a population of 580m and an economy bigger than India's, sidelined the rice dispute by agreeing to come back to the issue after the implementation of zero tariffs for the bulk of tradeable goods.
But the prospects for a deal receded yesterday when Manila announced that it would maintain a 35 per cent tariff on rice imports, while providing Thailand with a tariff-free allowance of 360,000 tonnes a year.
Manila's action is not a breach of the trade agreement, which lets rice be treated as a "highly sensitive" product until a deal is reached on a tariff cap.
The Philippines is the world's largest importer of rice, but Thailand's at-tempts last year to sell rice to Manila consistently lost out to government-to-government deals between the Philippine and Vietnamese governments.
Analysts said that the tariff-free quota was unlikely to be completely taken up by open market purchases because Thai prices were considerably higher than those of Vietnam.
Separately, Thailand, the world's biggest rice exporter, said it would restrict imports to low-quality "broken" rice used as a raw material, and insisted that imports would have to pass through six specified "checkpoints".
The commerce ministry said imports would be allowed only within two three-month periods at times when Thai production was low, and would be subject to licensing, quality inspections and proof of origin checks.
The Thai government is having trouble shifting the 6m tonnes of rice it has stockpiled as a result of an intervention-buying scheme designed to protect a key agricultural sector, and is wary of allowing in large quantities of cheap imports.
Thailand moved away from intervention buying last year to a direct support scheme for smaller farmers, and the stockpiles are set to fall in coming months.
Thailand's intervention pricing scheme made it an attractive destination for smugglers from surrounding lower cost producers such as Vietnam and Cambodia. But Kiat Sittheeamorn, Thailand's chief trade representative, said the switch to direct payments six months ago had cut illegal imports.
The measures illustrate the depth of antagonism to rice trading in the region, and the difficulty of negotiating a compromise on a common tariff regime.
Six members of the 10-country Association of South-East Asian Nations achieved tariff-free trade for 99.1 per cent of goods from January 1, with the remaining four due to achieve zero tariffs by 2015.
Asean, which has a population of 580m and an economy bigger than India's, sidelined the rice dispute by agreeing to come back to the issue after the implementation of zero tariffs for the bulk of tradeable goods.
But the prospects for a deal receded yesterday when Manila announced that it would maintain a 35 per cent tariff on rice imports, while providing Thailand with a tariff-free allowance of 360,000 tonnes a year.
Manila's action is not a breach of the trade agreement, which lets rice be treated as a "highly sensitive" product until a deal is reached on a tariff cap.
The Philippines is the world's largest importer of rice, but Thailand's at-tempts last year to sell rice to Manila consistently lost out to government-to-government deals between the Philippine and Vietnamese governments.
Analysts said that the tariff-free quota was unlikely to be completely taken up by open market purchases because Thai prices were considerably higher than those of Vietnam.
Separately, Thailand, the world's biggest rice exporter, said it would restrict imports to low-quality "broken" rice used as a raw material, and insisted that imports would have to pass through six specified "checkpoints".
The commerce ministry said imports would be allowed only within two three-month periods at times when Thai production was low, and would be subject to licensing, quality inspections and proof of origin checks.
The Thai government is having trouble shifting the 6m tonnes of rice it has stockpiled as a result of an intervention-buying scheme designed to protect a key agricultural sector, and is wary of allowing in large quantities of cheap imports.
Thailand moved away from intervention buying last year to a direct support scheme for smaller farmers, and the stockpiles are set to fall in coming months.
Thailand's intervention pricing scheme made it an attractive destination for smugglers from surrounding lower cost producers such as Vietnam and Cambodia. But Kiat Sittheeamorn, Thailand's chief trade representative, said the switch to direct payments six months ago had cut illegal imports.
The measures illustrate the depth of antagonism to rice trading in the region, and the difficulty of negotiating a compromise on a common tariff regime.
India rice stocks swell; local purchases drop
India's rice stocks at government warehouses more than doubled on Jan. 1 even as purchases of the grain by state agencies dropped 1.1 percent since the beginning of the marketing year in October.
Traders say higher stocks will obviate import needs of India, the world's second-biggest producer of rice.
Government officials said the country's rice stocks were at 24.3 million tonnes on Jan. 1, more than double the target of 11.8 million tonnes.
But purchases from local farmers dropped 1.1 percent from a year ago to 16.8 million tonnes between Oct. 1 and Jan. 10.
The northern state of Punjab, a leading producer, bought 9.2 million tonnes of rice from local farmers from Oct. 1, up from 8.1 million tonnes a year ago.
Purchases by neighbouring Haryana state were at 1.8 million tonnes year-on-year against 1.4 million tonnes.
Although purchases rose in the two key northern states, procurement fell in other states, the officials said.
Slowing procurement did not signal import needs, traders said.
"I do not see any need for imports. We have sufficient stocks. In my view, procurement will not drop to a level where we need to import," said Vijay Sethia, a big exporter and past president of the All India Rice Exporters Association.
India's summer-sown rice output is expected to drop 15.3 million tonnes to 71.65 million tonnes after the worst drought since 1973 ravaged the crop planted during the rainy months of June and July.
While bulging rice stocks ease fears of a shortage, rising wheat inventory will add to storage concerns, analysts say.
Government officials said stocks of wheat at government warehouses were at 23.0 million tonnes on Jan. 1, nearly three times the targeted 8.2 million tonnes.
"Close on the heels of a bumper output last year, the government expects farmers to produce 2 million tonnes more than last year. Where will the government store wheat?" asked Ranji Panicker, head of research with MF Global Commodity India.
Wheat output in India, the world's second-biggest producer, was at a record 80.6 million tonnes in 2009.
Traders say higher stocks will obviate import needs of India, the world's second-biggest producer of rice.
Government officials said the country's rice stocks were at 24.3 million tonnes on Jan. 1, more than double the target of 11.8 million tonnes.
But purchases from local farmers dropped 1.1 percent from a year ago to 16.8 million tonnes between Oct. 1 and Jan. 10.
The northern state of Punjab, a leading producer, bought 9.2 million tonnes of rice from local farmers from Oct. 1, up from 8.1 million tonnes a year ago.
Purchases by neighbouring Haryana state were at 1.8 million tonnes year-on-year against 1.4 million tonnes.
Although purchases rose in the two key northern states, procurement fell in other states, the officials said.
Slowing procurement did not signal import needs, traders said.
"I do not see any need for imports. We have sufficient stocks. In my view, procurement will not drop to a level where we need to import," said Vijay Sethia, a big exporter and past president of the All India Rice Exporters Association.
India's summer-sown rice output is expected to drop 15.3 million tonnes to 71.65 million tonnes after the worst drought since 1973 ravaged the crop planted during the rainy months of June and July.
While bulging rice stocks ease fears of a shortage, rising wheat inventory will add to storage concerns, analysts say.
Government officials said stocks of wheat at government warehouses were at 23.0 million tonnes on Jan. 1, nearly three times the targeted 8.2 million tonnes.
"Close on the heels of a bumper output last year, the government expects farmers to produce 2 million tonnes more than last year. Where will the government store wheat?" asked Ranji Panicker, head of research with MF Global Commodity India.
Wheat output in India, the world's second-biggest producer, was at a record 80.6 million tonnes in 2009.
Turkey rice tariff quota allocation
The Government of Turkey allocated a duty free rice import quota of 100,000 MT to the Turkish Grain Board (TMO), available until December 31, 2010.
In the Official Gazette dated December 31, 2009, the Government of Turkey allocated a rice import quota of 100,000 MT to the Turkish Grain Board (TMO) at a zero tariff rate, available until December 31, 2010. TMO would like to use 20,000 MT-25,000 MT of the rice quota very soon, in order to build up their stocks. It is known that TMO currently has very limited stocks, although the actual amount is undisclosed.
In MY2009 TMO exported 580,000 MT of wheat, 330,000 MT of barley and 300,000 MT of corn.
In the Official Gazette dated December 31, 2009, the Government of Turkey allocated a rice import quota of 100,000 MT to the Turkish Grain Board (TMO) at a zero tariff rate, available until December 31, 2010. TMO would like to use 20,000 MT-25,000 MT of the rice quota very soon, in order to build up their stocks. It is known that TMO currently has very limited stocks, although the actual amount is undisclosed.
In MY2009 TMO exported 580,000 MT of wheat, 330,000 MT of barley and 300,000 MT of corn.
Philippines has bought enough rice for 2010
The Philippines has bought enough rice for 2010, Agriculture Secretary Arthur Yap said, implying the world's biggest rice buyer may be out of the market for now.
The state-run National Food Authority (NFA) contracted to import 1.82 million tonnes of milled rice in four tenders in the last months of 2009, the bulk from Vietnam.
Including re-orders from the tenders, total imports would top 2.2 million tonnes, near a record 2.3 million tonnes bought in 2008, which helped lift grain prices to record highs.
''That volume is already comfortable for the year,'' Yap told reporters.
''If there's a need to import more, (the allocation) will probably be given to the private sector,'' he said, adding the decision lies with the NFA.
The Philippines, which imports around 10 percent of its yearly rice needs, has allowed private firms to import rice since 2002 to curb smuggling.
Private importers brought in 200,000 tonnes of rice last year, and the government may give the same allocation this year, NFA director Romeo Jimenez said in November.
Jimenez said last week the agency has targeted to buy 584,000 tonnes of unmilled rice from local farmers this year, up 30 percent from 2009.
The state-run National Food Authority (NFA) contracted to import 1.82 million tonnes of milled rice in four tenders in the last months of 2009, the bulk from Vietnam.
Including re-orders from the tenders, total imports would top 2.2 million tonnes, near a record 2.3 million tonnes bought in 2008, which helped lift grain prices to record highs.
''That volume is already comfortable for the year,'' Yap told reporters.
''If there's a need to import more, (the allocation) will probably be given to the private sector,'' he said, adding the decision lies with the NFA.
The Philippines, which imports around 10 percent of its yearly rice needs, has allowed private firms to import rice since 2002 to curb smuggling.
Private importers brought in 200,000 tonnes of rice last year, and the government may give the same allocation this year, NFA director Romeo Jimenez said in November.
Jimenez said last week the agency has targeted to buy 584,000 tonnes of unmilled rice from local farmers this year, up 30 percent from 2009.
Rice Export Prices Unlikely to Decline
Rice export prices will probably be sustained at about $600 per metric ton after drought and floods damaged crops in India and the Philippines, an agricultural economist said. Rice futures rallied in Chicago.
“It is safe to say that the rice price is not going back to $300 per ton any time soon and is likely to remain around $600 in the near term,” Samarendu Mohanty, a senior economist at the International Rice Research Institute, said in a report to be published today, without citing a definite time frame.
The Asian rice price benchmark jumped to $607 per ton in Thailand last week from 2009’s low of $525 as the Philippines, the world’s biggest importer, advanced purchases and on concern India may become a net importer after a drought parched crops last year. The grain has averaged $616 since Dec. 2, according to Bloomberg data.
Higher costs for the staple for half the world’s population may push more people in least developed nations into hunger and some Asian governments may be forced to subsidize rice, widening their budget deficits, Frederic Neumann, senior Asia economist at HSBC Holdings Plc., said by phone from Hong Kong.
“One thing we saw in 2008 is that a gradual increase may well turn into a sudden spike and this could lead to political challenges further down the road,” he said.
Rice rose to a record in Chicago in April 2008 and the Asian benchmark export prices jumped to their highest level ever a month later, after India and other exporting countries curbed shipments, adding to concerns of shortages that sparked riots from Haiti to Egypt.
The Philippines may need to buy between 500,000 and 1 million tons overseas, adding to purchases from tenders last quarter, the U.S. Rice Producers’ Association said in a report published Jan. 8. State-run National Food Authority purchased about 2.2 million tons of overseas supplies in the tenders for delivery this year, spokesman Rex Estoperez said last week.
Rice futures in Chicago have jumped 34 percent from last year’s low of $11.195 per 100 pounds. The March-delivery contract rose for the first time in five sessions, gaining as much as 1 percent to $15.10 in after-hours trading in Chicago, reversing a 0.5 percent loss earlier.
Futures may rise to $16 per 100 pounds in the next three months as the Philippines remains in the import market, Peter McGuire, managing director at CWA Global Markets Pty, said by phone from Sydney today.
Global rice stockpiles are forecast to decline 2.7 percent to 121.1 million tons at the end of the 2009-2010 season because of smaller crops in countries including India, the Philippines, Iraq, Nepal, and Pakistan, the UN Food and Agriculture Organization said last month.
Still, the global inventory will be higher than the 110.8 million tons in the 2007-2008 season, the FAO said.
“Unfortunately, most of these additional stocks, with the exception of Thailand, will not be available to the market in case prices start to rise,” Mohanty said in the report sent to Bloomberg News by e-mail.
India’s government will have 42 million tons available for sale to the poor in the marketing year ending March 31, against a requirement of 25 million tons, the U.S. Department of Agriculture’s Foreign Agricultural Service said last month.
Stockpiles in India “should provide much-needed relief to the market,” because it will mean the South Asian nation does “not need to turn to imports,” Mohanty said.
India, the world’s second-biggest producer, may harvest 71.65 million tons of the monsoon-sown rice, higher than the 69.45 million tons forecast in November, the government said last month. Warehouses held 15.35 million tons on Oct. 1, the start of the new marketing year, the government said Jan. 5.
“Regardless of the press from the Indian government, the belief is widespread throughout the rice trade that something between 2 and 3 million tons of imported rice will be bought there sometime in the next three months,” the U.S. Rice Producers said.
A purchase in excess of 2 million tons by India will make the South Asian nation a net importer for the first time in more than two decades. India, which ships higher-value basmati rice, was forecast by the U.S. Department of Agriculture last month to export 2 million tons this year.
“We see the human and political imperative there to make this unavoidable,” U.S. Rice Producers said, referring to India importing as much as 3 million tons. “It is difficult to see prices falling much, if any, given the world situation.”
“It is safe to say that the rice price is not going back to $300 per ton any time soon and is likely to remain around $600 in the near term,” Samarendu Mohanty, a senior economist at the International Rice Research Institute, said in a report to be published today, without citing a definite time frame.
The Asian rice price benchmark jumped to $607 per ton in Thailand last week from 2009’s low of $525 as the Philippines, the world’s biggest importer, advanced purchases and on concern India may become a net importer after a drought parched crops last year. The grain has averaged $616 since Dec. 2, according to Bloomberg data.
Higher costs for the staple for half the world’s population may push more people in least developed nations into hunger and some Asian governments may be forced to subsidize rice, widening their budget deficits, Frederic Neumann, senior Asia economist at HSBC Holdings Plc., said by phone from Hong Kong.
“One thing we saw in 2008 is that a gradual increase may well turn into a sudden spike and this could lead to political challenges further down the road,” he said.
Rice rose to a record in Chicago in April 2008 and the Asian benchmark export prices jumped to their highest level ever a month later, after India and other exporting countries curbed shipments, adding to concerns of shortages that sparked riots from Haiti to Egypt.
The Philippines may need to buy between 500,000 and 1 million tons overseas, adding to purchases from tenders last quarter, the U.S. Rice Producers’ Association said in a report published Jan. 8. State-run National Food Authority purchased about 2.2 million tons of overseas supplies in the tenders for delivery this year, spokesman Rex Estoperez said last week.
Rice futures in Chicago have jumped 34 percent from last year’s low of $11.195 per 100 pounds. The March-delivery contract rose for the first time in five sessions, gaining as much as 1 percent to $15.10 in after-hours trading in Chicago, reversing a 0.5 percent loss earlier.
Futures may rise to $16 per 100 pounds in the next three months as the Philippines remains in the import market, Peter McGuire, managing director at CWA Global Markets Pty, said by phone from Sydney today.
Global rice stockpiles are forecast to decline 2.7 percent to 121.1 million tons at the end of the 2009-2010 season because of smaller crops in countries including India, the Philippines, Iraq, Nepal, and Pakistan, the UN Food and Agriculture Organization said last month.
Still, the global inventory will be higher than the 110.8 million tons in the 2007-2008 season, the FAO said.
“Unfortunately, most of these additional stocks, with the exception of Thailand, will not be available to the market in case prices start to rise,” Mohanty said in the report sent to Bloomberg News by e-mail.
India’s government will have 42 million tons available for sale to the poor in the marketing year ending March 31, against a requirement of 25 million tons, the U.S. Department of Agriculture’s Foreign Agricultural Service said last month.
Stockpiles in India “should provide much-needed relief to the market,” because it will mean the South Asian nation does “not need to turn to imports,” Mohanty said.
India, the world’s second-biggest producer, may harvest 71.65 million tons of the monsoon-sown rice, higher than the 69.45 million tons forecast in November, the government said last month. Warehouses held 15.35 million tons on Oct. 1, the start of the new marketing year, the government said Jan. 5.
“Regardless of the press from the Indian government, the belief is widespread throughout the rice trade that something between 2 and 3 million tons of imported rice will be bought there sometime in the next three months,” the U.S. Rice Producers said.
A purchase in excess of 2 million tons by India will make the South Asian nation a net importer for the first time in more than two decades. India, which ships higher-value basmati rice, was forecast by the U.S. Department of Agriculture last month to export 2 million tons this year.
“We see the human and political imperative there to make this unavoidable,” U.S. Rice Producers said, referring to India importing as much as 3 million tons. “It is difficult to see prices falling much, if any, given the world situation.”
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