India Says ‘No Immediate Plan’ to Allow Wheat Exports

India, the world’s second-biggest wheat grower, has “no immediate plan” to lift ban on exports and will instead boost open-market sales and increase supplies to the poor to pare stockpiles, Farm Minister Sharad Pawar said. “There is no question of allowing wheat exports,” he told reporters in New Delhi. “We will consider allocating more wheat to the Above Poverty Line families.” Retaining the curb may ease pressure on wheat prices which have slid 27 percent from last year’s high of $6.77 a bushel in Chicago amid increasing world supplies. Global output may total 678 million tons, up from 677.441 million tons estimated a month earlier, the U.S. Department of Agriculture said March 10. May-delivery wheat fell as much as 1.2 percent to $4.905 a bushel on the Chicago Board of Trade, after closing 1.9 percent higher yesterday. India’s government needs to empty its warehouses to create room for this year’s record harvest, Pawar said March 4. Output may top 80.28 million tons, swelling reserves to 14.71 million tons on April 1, twice the quantity needed to meet emergencies. Reserves on March 1 were 18.38 million tons, more than four times the buffer requirement, according to farm ministry data. “Storage is a worrying factor,” Pawar said today. Stockpiles of wheat and rice totaled 47 million tons as of March 1, prompting the finance ministry to say last month that “urgent attention” must be given to paring storage costs that are placing a “lot of stress on the fiscal system.” India halted exports of wheat in February 2007 and common rice varieties in April 2008 to cool domestic prices.

Thai priem minister vetoes pumping up paddy price by 200 baht

Prime Minister Abhisit Vejjajiva has put the brakes on a Commerce Ministry proposal to raise the buying price for paddy by 200 baht, saying that higher-than-market prices would affect the government's rice insurance scheme and confuse farmers. Commerce Minister Porntiva Nakasai said the premier had instead directed the ministry to study other ways to shore up rice prices. The Commerce Ministry recently came up with a plan to raise state buying prices for paddy by 200 baht per tonne from the current benchmark prices now set at 8,919 baht per tonne as a way to overcome the domestic paddy price slump, especially for 5% white rice. The price increase was meant to drive up market prices and cut the price gap between market rates and the government's insurance scheme, reducing the government's compensation as a result. The Democrat-led government first introduced the crop insurance or options programme for the 2009-10 harvest season to manage key crop prices and guarantee farmers' incomes. It replaces a pledging scheme used by successive governments that offered high prices and proved to be politically popular in rural communities. The new price insurance scheme represents income support paid directly to farmers. Payments will be based on the difference between insured prices and benchmark prices, regardless of the market prices farmers receive when they sell their crop. The insured prices are based on average costs and a profit margin of 30% to 40%. The benchmark prices are based on the weighted average wholesale prices of rice in Bangkok equivalent to paddy with less than 15% moisture content. The benchmark price is set on the first and sixteenth days of each month. The programme is designed to benefit all farmers, particularly small-scale operators. Compensation will be transferred directly to farmers by the Bank for Agriculture and Agricultural Co-operatives (BAAC). Farmers will manage their own sales decisions in terms of when to capitalise on the spread between the insured price and the benchmark price. "I must admit it will be tough to attract millers to participate in the government's rice-buying scheme, as traders by nature want to buy cheap," said Mrs Porntiva. Traders and millers mostly prefer the pledging scheme, as they earn extra revenue from rice polishing and warehouse rentals for storing government rice.

Business worried about strong baht

The private sector was concerned about the strengthening of the baht's value as it could hurt trade negotiations and exports from the second quarter of the year onward, Commerce Minister Porntiva Nakasai said. “The private sector wants the government to closely oversee the baht’s movement to ensure that its will not be too much fluctuation or too strong. The strong baht will affect the country’s trade competitiveness,” Mrs Porntiva said on Thursday. The commerce minister believed the strong baht would be only short-lived as the Bank of Thailand is capable of curbing its value. Her ministry stood by its export expansion target for this year at 14 per cent. The chairman of the Rice Exporters Association, Chukiat Opaswong, predicted that if the value of baht stands at 33 baht per US dollar, rice exports in March will go down to 650,000 tones and 600,000 tonnes in April, from 700,000 tonnes a month in January and February. Mr Chukiat said the country has already lost its competitiveness in trading in white and jasmine rice because our prices are now about $200 to $300 a tonne more expensive than those of other Asean members. He said rice exporters will ask the Commerce and Finance ministries to find ways to curb the baht's value. “The baht is now the strongest currency in Asean, forcing Thailand’s trade partners to ask for a price review. There is a concern that the buyers will cancel their advance purchasing deals in the next one or two weeks,” he stated.

S.E.Asia dry spell thins palm, rubber supply; threatens rice

A severe dry spell across a wide swathe of Southeast Asia threatens to curb output of palm oil and rubber, while the weakest rainfall in more than a decade may cripple rice planting in top exporters Thailand and Vietnam, according to a Reuters report on Thursday, March 18. The resurgence of an El Nino weather pattern in a region that is the world's biggest producer of palm oil, rice and rubber and a key supplier of coffee and cocoa has brought hotter weather to farms and PLANTATION []s, drying out trees and sapping yields. Taking the brunt of the harsh weather are Thailand and Vietnam, which together furnish half of world rice exports of about 30 million tonnes a year; some stretches of the island of Borneo and pockets of Indonesia, the world's largest palm oil producer; and even Australia is being affected slightly. Falling palm oil supplies from Malaysia and Indonesia, responsible for 85 percent of global production, could stiffen Malaysian benchmark futures , now up 45 percent from January 2009 lows. The Tokyo rubber market should climb in March, bolstered by strong demand and a sharp decline in supply, which have pushed physical prices to 58-year highs. "It looks quite severe as of now, and of course, everyone is hopeful this won't last, and the weather will be back to normal, but so far we haven't seen that," said analyst Ivy Ng of investment bank CIMB in Kuala Lumpur, who tracks palm oil firms. "If there are no rains until June, the trees will be stressed and it could have impact on production in the second half of the year or even in the first half." Poor rains in Indonesia, the world's largest palm oil producer, mean this year's output will miss the industry target of 21.5 million tonnes by about 5 percent. Neighbouring Malaysia is also likely to see production drop, just as the trade geared up for a seasonal output rebound. Planters in Malaysia's top palm oil producing state of Sabah on the island of Borneo say continuing hot weather could chip 10 percent off production this month after February's monthly slide of 15 percent. The situation is no better in peninsular Malaysia. "We only get very light showers in the morning, after that its good-bye, rain," said an official with a palm plantation in Sabah. "On the roadsides leading to the plantations, the grass is turning brown." COULD STRETCH INTO 2011 The dry weather could stretch far into 2011, analysts warned, shrinking output and supplies. "The current lag in palm oil output is due to last year's dry weather," respected analyst Dorab Mistry, head of vegetable oil trading at India's Godrej International, told Reuters. "The dry weather of 2010 will hurt production in the fourth quarter and first quarter of 2011." The situation is not too different for rubber, chiefly produced by Thailand, Indonesia and Malaysia, where the industry expects a downward revision in output as trees hit by moisture stress look likely to produce less latex. Thai rubber production in 2010 will miss a January forecast of 3.15 million tonnes by 5 percent because of the dry weather, a senior industry official said. "This year we would have around 3.0 million tonnes as the weather is expected to be very hot and dry," Luckchai Kittipol, president of the Thai Rubber Association, told Reuters. Poor rains may have spared rice in Thailand and Vietnam so far, but dry weather could force farmers to plant fewer acres with the next crop, although ample stocks make a big impact on benchmark Thai prices unlikely. Apichart Jongsakul, secretary general of Thailand's Office of Agricultural Economy, said the government had asked farmers to grow less off-season rice as key reservoir levels had dropped. "We now expect to have around 7 million tonnes of paddy rice from the second crop, down from around 8 million forecast earlier," Apichart said. MEKONG DELTA PARCHED Dryness brought by El Nino has parched Vietnam's southern Mekong Delta which could threaten planting for summer-autumn crop, the country's 2nd highest yielding crop. The world's biggest rice buyer, the Philippines, is suffering its worst dry spell since 1998, having lost more than 200,000 tonnes of paddy so far, which could drive it to import as much as 3 million tonnes of rice, officials say. Rice imports in 2010 already stand at a record 2.45 million tonnes. The situation is not ideal for the wheat crop in Australia, the world's fourth largest exporter, where the weather bureau predicts a 50:50 chance of normal rains in the crucial planting period between March and May. Rain could also be below average at the same time in the southwest of Western Australia, the country's top grain-exporting state, the bureau said. Still, Australia's second largest grain producting state, New South Wales, among those worst affected by drought in recent years, has staged a remarkable turnaround since the start of 2010, as the area officially declared in drought dropped by half. - Reuters

COFCO launches rice processing base in Jilin

COFCO Group, which is a leading foodstuff company in China and is controlled by the central government, on Mar. 16 inked an agreement to build a base for rice processing in Jilin Economic and Technological Development Zone in Jilin Province, sources reported. The state-owned food giant intends to invest RMB 600 million in the project, which will have an area of 20 hectares and will be able to process 300,000 tons of rice per year. The sales revenue of project is expected to exceed RMB 700 million. China Agri-Industries Holdings Ltd<0606>, a subsidiary of COFCO Group, plans to invest in non-grain ethanol plants in Guangdong Province and Hainan Province, said Ning Gaoning, board chairman of the parent. However, the plan is subject to approval from the National Development and Reform Commission.

India's rice purchases from farmers fall 2 pct-govt

India's rice purchases from farmers have fallen 2.4 percent since October, when the current marketing year began, the government said in a statement on Wednesday. Purchases between Oct. 1 and March 16 were at 24.3 million tonnes, down from 24.9 million tonnes in the same period a year earlier, it said. State-run agencies buy wheat and rice from domestic farmers to build strategic stocks for emergency needs, supply grains at cheaper rates to the poor and protect farmers from distress sale. India, the world's second-biggest producer of rice, had bought 33.7 million tonnes of the grain from local farmers in 2008/09. The country last month forecast summer-sown harvests of the grain, hit by last year's weakest monsoon in 37 years, at 72.87 million tonnes, 14.2 percent lower than a year earlier. In December, the government had forecast summer-planted rice harvest, which normally accounts for 80 percent of India's total rice output, at 71.65 million tonnes. Farmers plant the summer-sown varieties in the monsoon months of June and July and harvest the crop from October.

Sri Lanka rice update

A paddy harvest of 2.6 million metric tons is expected from the current Maha season harvest. The total paddy output of the year is expected to be 4 million metric tons. Unlike previous years, there is no maximum limit on paddy purchased from farmers. Eighty paddy purchasing centres are operating islandwide with a number of additional storage centres opened. Despite much outcry on the contrary, current purchase prices for paddy is set to provide maximum benefit to the farmer while offering reasonable utility to the consumer. The minimum purchase price of 1 kilo is currently Rs.28 for Nadu and Rs.30 for Samba. A further increase in purchase price will raise the retail price to over Rs.80 per kilo, causing much discomfort to the consumer. Additional Secretary (Services), Ministry of Agriculture Development and Agrarian Services, M.H. Muineed, made these comments in answer to allegations raised by the Opposition that had they been in power, the purchase price would be in a range of Rs 35 - Rs 45. He further stated that complaints of paddy prices as low as Rs.18 in certain areas was due to the low quality, specifically undried paddy being put up for sale immediately following harvesting. To prevent a paddy shortage arising due to wholesalers withholding stock, a buffer stock of 15 percent of the monthly consumption need is to be maintained this year. The aggregate amount is far higher than last year’s annual buffer stock of 50,000 metric tons. Under the ‘Api Wawamu Rata Nagamu’ food production program, 2010 is set to see much expansion in the agriculture sector. A sum of Rs. 750 million has been allocated for this year’s projects by the Treasury. Special prominence is to be given to development in the North under the ‘Uthuru Vasanthaya’ program. A sum of rupees ninety thousand has been allocated for this purpose. Eighteen thousand hectares of abandoned paddyfields are planned to be cultivated this year.

Philippines weighing options on protecting rice market under WTO

THE government is carefully weighing its options on protecting the Philippines’ rice market, as it could entail opening up the country’s market for other farm goods traded under the World Trade Organization (WTO). An official of the Department of Agriculture (DA) also disclosed that it would be up to the next administration to determine whether it would negotiate for the retention of the quantitative restriction (QR) on rice. “[The DA] will just make a recommendation but it will be up to the next administration whether it will go for the retention of the QR,” said the DA official who is privy on trade matters. So far, the official said the DA has not yet come up with a final recommendation regarding the possible extension of the QR on rice and that the matter is under “careful study.” The DA official also noted that another area of concern is the current Doha round of negotiations at the WTO. “We have to consider the Doha round of negotiations [because] of its impact on sequencing. We [need] to wait for the final outcome and see whether there will be cuts in the tariffs on rice,” the official said. While rice farmers were able to gain a temporary reprieve from the threat of the removal of the QR in 2004, the official noted that a number of concessions were given to member-countries of the WTO who signified their intention to negotiate the retention of the QR on rice. “[The Philippines] did not just allow the entry of rice from other trading partners; we also had to give them access to our wine market and milk market,” the official said. The QR has allowed the Philippines to limit the volume of rice that can be imported by the government every year, preventing a possible influx of cheap rice imports. In exchange for extending the QR until 2012, the Philippines agreed to increase its minimum access volume (MAV) for rice to 350,000 metric tons (MT) as a concession. The Philippines also reduced tariffs on rice to 40 percent, from 50 percent in 2007. MAV refers to the minimum volume of farm produce, which it will allow to enter into the Philippines at reduced tariffs. The Philippines filed its intention to extend the QR on rice in March 2004 as it was set to expire in June 2005. Extensive negotiations for it followed, with Manila holding discussions with nine countries that signified their intention to negotiate the request. Manila had to conduct bilateral negotiations with nine WTO members, namely, the United States, China, India, Argentina, Pakistan, Egypt, Canada, Australia and Thailand. The Philippines obtained formal approval from the WTO to extend the QR in December 2006. The government pushed for the extension of the QR, citing the need to prepare Filipino farmers for international trade and to achieve rice self-sufficiency. The Philippines had originally targeted to achieve rice self-sufficiency by 2010. The government was forced to move its target to 2013 due to the lack of funding, as well as the challenges posed by climate change.

Japan’s Consumption of Rice, Wheat May Fall, U.S. Agency Says

Rice and wheat consumption in Japan is flat and may decline as the country’s demographics change, according to a U.S. Department of Agriculture agency. Per-capita rice consumption was 59 kilograms (130 pounds) in 2009, the USDA’s Foreign Agricultural Service said today in a report, citing estimates from the government in Tokyo. Wheat consumption is projected to decline 0.9 percent to 5.65 million metric tons in the year that starts in July, the agency said. Rice consumption is projected to fall 1 percent to 8.13 million tons in the year that begins in November, according to the unit. Japan’s corn consumption, mostly for animal feed, also is expected to slow as the number of cows, hogs and poultry stagnates, the USDA group said. The nation’s corn use is projected to drop 1.5 percent to 16.05 million tons in the year that begins in October.

Philippines to cut H1 paddy rice forecast

The Philippines may cut its paddy rice output forecast for the first half of 2010 by about 3.4% to around 7 million tons as hot weather shrinks the harvest, a senior government official said on Tuesday. The latest estimate is for first-quarter output of paddy, or unhusked rice, to come in at around 3.63 million tons, lower than the previous forecast of 3.8 million tons and nearly 8% less than a year earlier, said Maura Lizarondo, assistant director at the Bureau of Agricultural Statistics. "Based on the updated Q1 forecast, the first-half estimate may be revised down to around 7 million tons from 7.25 million tons," Lizarondo told Reuters in a phone interview. This year's drier-than-usual weather, the worst to hit the Philippines since 1998, is parching farmlands. Lizarondo said it was possible the first-half forecast may be cut further as the second-quarter harvest was also likely to be hit. She said both harvest areas and crop yields had fallen. More than 200,000 tons of paddy have been lost due to the dry spell, and last month the government said a severe drought could see losses exceed 800,000 tons. The Philippines is the world's biggest importer of rice. Its 2010 imports are already at a record 2.45 million tons, and officials have said extended dry weather could see them top 3 million tons. But Lizarondo said this year's El Nino is unlikely to be as severe as the one that hit the Philippines in 1998 when rice production contracted 24%. The weather bureau has forecast a moderate El Nino condition until June, delaying the monsoon season to the second half of that month. It has forecast below-normal rainfall for April-June for most of the country, although it forecast near-normal rainfall for some parts of southern Luzon, the country's biggest island. Besides El Nino, Lizarondo said there were also reports of rat infestations in key rice-growing areas in the central part of the main Luzon island.

Falling rice prices may draw buyers to the table

Slow demand has lopped $100 off Asian rice prices from last year’s peak, returning them to levels last seen in 2008, but a further drop could revive the appetite of key buyers, including Africa and the Middle East. The benchmark price has fallen steadily after the Philippines, the world’s biggest buyer, tied up most of its 2010 needs late last year, while the chances of India going to the market are slim, given its bulging stocks. Stocks of nearly 27 million tons in India could push the world’s second-biggest producer to lift a ban on exports of common rice grades that dates to October 2007. "Prices are dropping now and buyers are just in a wait-and-see mode," said Cao Thi Ngoc Hoa, vice general director at Vinafood 2, Vietnam’s largest rice exporter. "There’s demand from Africa and the Middle East but they’re probably waiting for the price drop to stop before they buy." Benchmark Thai rice has fallen from a December 2009 peak of $630 a ton, hit during a series of Philippine tenders, to $530 a ton, its lowest this year. Top exporters Thailand and Vietnam, which are struggling to sell huge stocks of the Asian staple, have decided to halt sales for a few months during their harvests, hoping a short-term supply squeeze will support prices. While off from their peak, benchmark Thai rice prices are still easily double those of five years ago, as demand rises in step with a growing global population of 6.8 billion, nearly half of whom eat the grain as a staple. Prices were below $400 in 2008, before a crisis trebled prices to a lifetime high of $1,080 that April, as buyers led by the Philippines scrambled to secure supplies and major exporters curbed sales. This year, Africa, a key market for Thailand, has largely skipped purchases, with higher production allowing countries there to wait for a further price drop before they decide to buy. "Africa has been a regular buyer of Asian rice, but has always been a price-conscious market. The last surge in prices due to the Philippines’ massive buying spree has adversely affected African demand," said Shahzad Naqi, chief executive of Pakistani rice exporter Peak Holding. Naqi said a further price drop may whet the appetite of African countries as well as Bangladesh and the Philippines, which could delay additional imports until after a national election in May, unless the El Nino weather condition worsens. The Philippines’ 2010 imports, already at a record 2.45 million tons, may top 3 million as its plugs a production gap caused by El Nino. The long hot season caused by the El Nino weather anomaly is estimated to knock 10 percent off Thailand’s main crop and around 5 percent off the Philippines’ annual output, totaling more than 3 million tons of paddy. The impact of El Nino on Vietnam was expected to be moderate. But the additional purchases are much less than the combined 16 million tons Vietnam and Thailand hope to sell this year. "If there’s no new demand coming, Thai rice could come down to below $500, probably $480," said Chookiat Ophaswongse, president of the Thai Rice Exporters’ Association. Outside Asia, El Nino is also affecting planting in the United States and South America, including major producer Brazil. "Normally, we are planting rice in Texas and South Louisiana but the weather is too wet and the temperatures too low and so some farmers are two weeks behind," said Dwight Roberts, president of the US Rice Producers’ Association. The El Nino weather phenomenon should fade by early summer in the northern hemisphere but there is a chance La Nina conditions will develop later in the year. The opposite of El Nino, La Nina cools Pacific Ocean waters and could bring storms that may hurt Asia’s rice production. El Nino notwithstanding, global milled rice production is forecast to exceed 460 million tons this year, FAO projections show, versus 452 million in 2009. "Farmers in the United States are going to have some opportunities to sell rice at a good price during 2010 but we are going to have to wait, watch the conditions in the Western Hemisphere and see when those spikes will occur," said Roberts. Experts say many countries’ continuing lack of investment in agricultural infrastructure to boost yields, and a thin global rice market, will continue to support prices, which are highly unlikely to return to below $300 a ton. The FAO sees globally traded rice at 30.5 million tons this year, little changed from 30 million tons in 2009, or just about 7 percent of world output. In Vietnam, an industry-imposed floor caps the price of its 5 percent broken rice at $420-$440 a ton, free-on-board, and $400-$420 a ton for its 25 percent grade, as Hanoi cushions price falls. Stockpiling by Thailand and Vietnam, which could boost Bangkok’s state-held rice inventory to 8 million tons from 6 million, and draw a fifth of the forecast 10 million tons of Hanoi’s winter-spring crop, should support prices before demand recovers.

After China, Philippines may approve GMO rice

The Philippines may follow China as the next Asian country to approve widespread planting of genetically modified rice crops, possibly as early as 2011, an industry expert said on Tuesday. The Philippines, the world's largest rice importer, is one of several countries currently in field tests for GMO rice crops, Robert Zeigler, director general of the Philippines-based International Rice Research Institute (IRRI), said at the Reuters Food and Agriculture Summit. Golden Rice, a Vitamin A-enriched grain developed by the IRRI is being bred into local varieties as well in Bangladesh, India, Indonesia and Vietnam as part of testing to ensure safety, he said. "There's some possibility that it would be the Philippines that will get approval next, for Golden Rice. Probably late 2011 or early 2012," Zeigler said. "Bangladesh will follow very shortly thereafter and India, probably a year or two later." China approved the safety of a locally developed insect-resistant Bt strain of rice last November, opening the door to widespread introduction of the GMO crop within about three years. With a gene bank of around 100,000 rice varieties, IRRI breeds high-yielding strains of rice to meet growing demand. The institute kickstarted the Green Revolution in the 1960s that boosted harvests of the staple food for nearly half the world's 6.8 billion population. VITAMIN A DEFICIENCY The availability of Golden Rice, which contains genes from maize and other sources of beta-carotene, was expected to address the deficiency of the micronutrient, Vitamin A, especially among the poor in Asia. Over 90 million children in Southeast Asia suffer from Vitamin A deficiency, more than in any other region, according to IRRI, and the introduction of Golden Rice in the Philippines may be largely meant to benefit public health instead of boosting yields to curb imports. China's newly approved pest-resistant variety could be used for up to 40 percent of the rice crop in the country, the world's top producer and consumer of the grain. PRESSURE ON RICE SUPPLY Zeigler said there is continuing pressure on global rice supply with a reduced amount of both water and land available for rice production which should prompt concern and study. The El Nino weather anomaly, which can induce drier weather in Asia, is also a threat to production, he said. "We need to have a combination of sound government policies to develop rice supplies and these policies need to be based on solid scientific research," said Zeigler.

Rough Rice futures commentary for March 16th.

Rice ended higher, extending its bounce amid widespread commodity gains. After plunging through the start of March, the market has now closed higher three straight days. But it is still well below last week’s high. “You can’t say it’s a bottom yet,” a floor trader said. Still, buying interest has increased, traders said, particularly in deferred contracts. Aweaker dollar helped push commodities higher generally, analysts said. May rice ended up 12 cents to $12.60 1/2 per hundredweight, and July rice closed up 11 1/2 cents to $12.90 1/2.

Thailand Rice Price - Weekly

Despite a strengthening Thai baht to 32.5 baht/$ from last week’s 32.7 baht/$, export prices declined by 1-2 percent due to quiet foreign demand. Foreign buyers are reportedly buying cheaper Vietnamese rice, with a price difference of over $100/MT. Also, some buyers are reluctant to conclude deals due to concerns of surging freight costs, which have doubled from the previous year. This week the government implemented the direct purchase program which enables farmers to sell paddy at benchmark prices. However, the program got off to a slow start as few millers have shown interest in program participation due to the unattractive terms and conditions, compared to those of the mortgage scheme. Only 1,500 tons of white rice paddy were bought this week out of a program allowance of 1.9 million tons and a credit line of 20 billion baht ($615 million). Yet, the program had a psychological impact on the market as it helped decelerate the reduction in domestic prices. The biweekly benchmark prices of MY2009/10 second-crop white rice for March 1-15, 2010 were lower than the previous period. However, market prices of paddy are much lower than current benchmark prices, as increasing supplies from off-season crops adds daily downward pressure on prices which the lagging benchmark price is unable to account for.

Vietnam Rice Price - Weekly

Rice price offers from exporters were virtually unchanged last week over the week before. The low demand from the export market has been a drag on prices since early this year. However, anticipation of increased demand has kept prices from dropping significantly. The decline in local paddy prices was arrested by the expectation for new demand from overseas and by the ongoing government rice buying program, which is intended to prevent drops in rice paddy prices.

Philippines ‘Wait-and-see’ mode on further rice import

THE PHILIPPINES, the world's top rice importer, is on a “wait-and-see” mode as far as further imports of the staple are concerned. Government officials said there were enough local stocks from previous orders and the estimates on drought-damaged crops were still being firmed up. “We are still on a ‘wait-and-see’ status. We are not under pressure because we ordered early and there are still deliveries coming in,” NFA deputy administrator Jose Cordero said in an interview. The NFA frontloaded 2.28 million tons of rice imports during tenders held in November and December last year. The total import volume for 2010, including the private sector’s, is at 2.48 million tons. “Out of our imports, about a million tons are still for delivery. The rest have been unloaded here or are in transit,” Cordero said. As for damage to rice crops due to the El Niño dry spell, NFA marketing director Romeo Jimenez said the estimated losses have not been verified and the interagency committee on rice and corn has not made recommendations on the matter. He added that local harvests in the coming months would add to the country’s grains inventory. More than 2.66 million tons of rice stocks are in government and commercial warehouses as well as in households, according to NFA documents. At a consumption rate of about 36,000 tons a day, that volume is enough to last 74 days. The government also noted that even drought-hit Isabela province saw its farmers harvesting palay. Mariano Dancel, National Irrigation Administration-Magat River Integrated Irrigation System operations manager, said in a phone interview that more than half of their service areas had already harvested palay. Magat dam serves about 77,000 hectares of farmland, mostly in Isabela. Palay planted on 33,000 hectares of land in Magat’s service areas were also maturing, Dancel pointed out. He said Magat dam could still provide irrigation water for these fields for about two weeks, by which time the dam’s water level might be down to 150 meters above sea level. The dam’s water level is currently at 153 meters and the normal level is 156.22 meters.

Philippines to stay out of rice market until after polls

Rice prices in top exporting countries Thailand and Vietnam may fall more as the Philippines may not tender for new supplies until after national polls in May, sources said on Friday. The absence of demand from the world's biggest rice buyer, the Philippines, would further weigh on Asian rice prices, with benchmark Thai rice already $100 off a December peak of $630 a ton, which was boosted by several tenders in Manila in 2009. An industry group in Vietnam, the world's second largest rice exporter after Thailand, has capped the price of 5% broken rice at $440 a ton, free-on-board, hoping it could come to the next Philippine tender with a high offer. In the absence of demand from its main customer, the Philippines, Vietnam's rice prices are likely to slip further with the major harvest peaking in two weeks, traders said. "Given the possibility of the Philippines having no tenders (until after the May elections), prices in Vietnam could drop," said an exporter in the Mekong Delta province of An Giang. "Exporters are not buying strongly now because they do not have buyers, they lack space in their warehouses and they also do not have sufficient funds," said a foreign company trader in Ho Chi Minh City. All Philippine government agencies are barred from seeking contracts ahead of elections to discourage corruption and the potential use of funds for campaigning. The ban takes effect from March 26 to May 10, the day of the elections, an official who is part of the rice bidding committee at the National Food Authority (NFA), told Reuters. The NFA can seek exemption from the ban in an immediate rice shortage or a crisis situation emerges, said another official. Manila's state-held rice stocks stand at 1.209 million tons, good for 33 days consumption, according to NFA. The Philippines's 2010 imports stand at a record 2.45 million tons. The country contracted 2.25 million tons from tenders in November and December last year for delivery until June and also allowed private firms to bring in 200,000 tons until Sept. 15. An NFA official said last month the country may import around 800,000 tons more if a dry spell hits crops adversely.

Cameroon to ban rice import

The Cameroonian govern ment will in the next few day s ban the import of rice to encourage local production, Cameroonian Trade Minist e r, Luc Magloire Mbarga Atangana, said on Friday. He noted that Cameroon imports 500,000 tons of rice every year from Asian countries valued at 100 billion FCFA. In addition, 100,000 tons of rice are smuggled into neighbouring countries, which causes an important loss of foreign currency for the country. To meet the rice self-sufficiency challenge, the minister urged economic operators to become rice farmers so as to create, at the same time, job opportunities and bridge the unemployment gap. 'The government is involved in a land retrieval process to implement agricultural projects and all those who will come to Cameroon for rice farming will have their own plots," he said.

Bangladesh internal rice merket

The coarse rice has been selling at taka 22 to 28 based on quality, middle quality BR-29 for taka 32 and the fine quality of rice at taka 40 to 41 in Amtally Upazilla of Barguna district The retailers said, there was litle sign of the price coming down soon.

Rough Rice futures commentary for March 15th.

Rough rice futures finished stronger as the market continued to bounce from recent losses. The modest recovery extended gains from Friday. “We’ve had a heck of a break in the last five days, the last 10 days,” a trader says. “We’re just digesting that.” May rice as of Monday’s close was down $1.27 1/2 on the month. Volume was thin in futures and options. Sep rice had solid technical support at and below Friday’s close of $12.43 per hundredweight, a trader says. There were small pops of buying interest in the market, as opposed to sustained interest, he says. May rice rose 5 1/2 cents to $12.48 1/2, and Sep rice ended up 2 1/2 cents at $12.65.

Egypt buys 49,000 tonnes of rice from local market

Egypt's General Authority for Supply Commodities (GASC) said on Thursday it bought 49,000 tonnes of rice from the local market through a tender. Nomani Nomani, vice chairman of GASC said the price range was 1,595-1,639 Egyptian pounds per tonne and the quantity was due to be supplied to the consumers under the subsidy programme between March 25 and April 14.

Rice millers seek higher warehouse rental fees

Rice millers yesterday proposed raising their warehouse rental fees for storing government rice by 20 baht to 75 baht per tonne in return for their participation in the government's rice-buying scheme. Kriengsak Tapananon, secretary of the Thai Rice Mills Association, said the millers were ready to participate in the state scheme if the government accepted their proposal. Millers claimed their income, particularly from rice polishing, has tumbled since the government replaced the long-used paddy-pledging programme with a price insurance scheme this year. They say they also have higher expenses from interest rates on loans for funds they have to place as collateral to the government if they participate in the rice-buying programme.Traders and rice millers mostly prefer the pledging scheme, due to their revenue from rice polishing and warehouse rentals for storing government rice. Yanyong Phuangrach, the permanent secretary for the Commerce Ministry, said the ministry would submit the millers' proposal to the premier and related agencies for consideration. To shore up paddy prices, the government has set up 42 buying units in 13 provinces. But so far only 12 mills out of 1,700 nationwide are participating. Thai rice prices, the benchmark for Asia, fell yesterday for an eighth week, to $538 a tonne, according to the Thai Rice Exporters Association. The price of 100% grade-B white rice declined 1.8% from $548 a tonne on March 3. The price of 25% broken rice was set at $450 a tonne, compared with $459 a tonne last week.

Thai Rice Output May Drop on Drought as El Nino Parches Region

Rice production in Thailand, the world’s largest exporter, may decline as drier-than-normal weather curbs yields, adding to signs that an El Nino may be hurting farm output across the region. “Unmilled rice output in the next crop year may fall below the average production level of 31 million tons if El Nino puts off rainfall,” Prasert Gosalvitra, head of the nation’s Rice Department, said today by phone from Bangkok. Thailand accounts for about a third of the global trade in rice. Lower production of rice from Thailand and palm oil from Malaysia caused by the dry weather may drive commodity prices higher, spurring food inflation. Asian agricultural companies including Wilmar International Ltd. may benefit from the surge, BNP Paribas SA told investors in a note today. “We’re worried that delayed rainfall will probably hurt output,” Apichart Jongskul, secretary-general of Thailand’s Office of Agricultural Economics, said today by phone. “The impact on the next crop has yet to be evaluated,” Apichart said. Thai output of unmilled rice in the year that started Oct. 1 may be between 27 million and 29 million tons, said Apichart. That’s unchanged from a forecast on Jan. 13, and 15 percent lower than the previous year’s 31.7 million tons, he said. The El Nino weather phenomenon, characterized by warmer sea-surface temperatures across the equatorial Pacific, can cut rainfall in Asia. Among the expected impacts from this month to May are drier-than-average conditions over Indonesia, according to a March 4 report from the U.S. Climate Prediction Center. ‘Driest Period’ “It’s the driest period I’ve ever seen,” Virapan Tipsuna, a 42-year-old farmer in Thailand’s northeastern province of Nongkhai, said yesterday in an interview. “It is so dry that the water supply is not enough for rice farming.” Palm oil, about 90 percent of which is produced in Indonesia and Malaysia, may surge this year as the El Nino curbs yields, analysts and traders including Prudential Bache Commodities LLC and Godrej International Ltd. warned this week. The commodity, trading today at 2,700 ringgit ($813) a ton, may jump to 3,200 ringgit, Godrej’s Dorab Mistry forecast. “Mistry’s expectations are similar to our own thesis of an extended El Nino and lower” palm oil production, BNP’s Michael Greenall wrote in today’s note, including among his top picks Indonesia’s PT Astra Agro Lestari, that country’s largest publicly traded plantations company. Astra Agro stock has almost doubled in the past year. Drought Spreads Drought is spreading in 36 of Thailand’s 76 provinces, mostly in the North and Northeast, which are major planting areas of rice and sugar, according to a statement on the government’s Web site. Water in reservoirs that can be consumed has dropped 15 percent this year, according to the Royal Irrigation Department. The Mekong River, which flows from China through five countries in Southeast Asia, is at its lowest level in 30 years near Thailand’s border with Laos, Thailand’s Department of Water Resources said yesterday. A drought in southern China, including Yunnan province, has left rivers at record lows, the Ministry of Water Resources said yesterday. Dry weather from El Nino has damaged 200,000 tons of rice in the Philippines, the world’s largest importer, Agriculture Secretary Bernie Fondevilla said on the same day. In Thailand’s Northeast, the water shortage, coupled with plant infestations, has damaged half of the rice crop, said Virapan, the farmer. “We just hope that it will rain soon and we don’t have to suffer again next year.”

GM paddy rice to hit China market shortly: expert

Genetically modified (GM) paddy rice is expected to be available in the market in about three to five years, according to a Ministry of Agriculture think tank member. Huang Dafang, a member of the think tank on the safety of GM food, rejected suggestions by four delegates to the Chinese People's Political Consultative Conference (CPPCC) that the commercialization of GM foods should be slowed down. "Our conclusion is clear. We are technically ready and have strong international competitive strength," Huang told Guangzhou Daily in Tuesday's edition. Huang said assessments from both the research center and other parties, such as the Center for Disease Control and Prevention, proved that GM rice is as safe as traditionally grown rice. The think tank has been studying and analyzing GM foods in China since 1999, and over 10 tons of GM rice is being tested on animals. But some experts and politicians said GM foods come with unknown risks. Cheng Enfu, a deputy to the National People's Congress (NPC), told hexun.com Tuesday that risks are hard to be assessed, and warned that there is a possibility of gene pollution. He called for legislation to supervise the commercialization, import and sales of GM grains and materials. Yuan Longping, a Chinese agricultural scientist and educator, told the national committee of CPPCC on Friday that the government should be prudent when approving the commercialization of GM plants. "Scientists cannot fully predict what kind of mutation might result from gene modification and the possible danger to the environment and human beings," Yuan said. The impact of GM foods will not be fully known until several decades later, he noted. He said it takes "two generations of people to prove the safety of GM foods," and called on volunteers to join him to eat GM foods to prove its safety. "If there is nothing wrong with the children of these volunteers, then the food is safe," Yuan said. But Yuan also said denying GM foods without scientific evidence is not appropriate. "GM foods are unavoidable and it's the future; more efforts should be paid in the research and application of GM techniques," he said. GM plants, often produced to resist pests and insect damage, can raise output and are relatively cheaper than traditional foods, scientists said. In November, the ministry granted safety certificates to two types of GM paddy rice and one type of GM corn produced domestically, for the first time. Last Tuesday, the ministry denied speculation that they gave the green light to import GM seeds and allowed largescale domestic cultivation, China Philanthropy Times reported Tuesday.

Asia Rice-Govt intervention helps, but Vietnamese prices slip

Asian rice prices were unchanged to slightly lower in thin trade on Wednesday, supported to some extent by intervention by the top two exporting countries but under pressure from weak demand, exporters said. The benchmark 100 percent B grade white rice in top exporter Thailand was steady at $530 per tonne. "The market is very quiet. I'm only selling a few containers of premium-grade fragrant rice to a traditional client in the Middle East," one exporter said. Despite new supply from the current harvest, domestic Thai prices were also unchanged, with milled white rice being sold by millers at 14,000 baht ($428) per tonne, supported by the latest government intervention programme aimed at helping farmers. The government started buying paddy direct from farmers on Feb. 26, at 10,000 baht ($306) per tonne. This will be added to government stocks, although they are already bursting with 6 million tonnes bought in previous intervention programmes, which the government has been trying unsuccessfully to sell. It has now said it will not release any rice from the stocks over the next few months to avoid adding to downward pressure on prices as supply peaks in April, when the second crop will have been harvested. Thailand is expected to produce around 7 million tonnes from the second crop. In Vietnam, the second-biggest rice exporter, prices continued to slip due to the major harvest peaking in two weeks, traders said. Domestic rice prices in Vietnam fell to 3,600-4,500 dong (18.9-23.6 U.S. cents) per kg this week from 3,800-4,500 dong last Wednesday. Based on local prices, indicative export prices of the 5 percent broken rice dropped to a range of $360-$390 a tonne, free on board, from $370-$430 last week. But exporters said they could not sell below the $440-a-tonne floor set by the Vietnam Food Association. "We are not making any moves now, given the floor," said a rice exporter based in the Mekong Delta province of An Giang. Another exporter in Ho Chi Minh City said domestic prices were easing because buying for the government's stockpiling scheme was going slowly due to a lack of funding. "Companies do not have funds ready so they rely on banks, but banks are disbursing money slowly," he said, adding that farmers were refusing to sell because of low prices. The central bank asked banks last week to prepare funds to help rice companies build up stockpiles, but at the same time it wants to restrict credit growth this year to 25 percent from 38 percent in 2009 to prevent the return of high inflation. However, the Vietnam Food Association said exporters had already bought 500,000 tonnes of husked rice, half of the volume targeted for March and April. Traders said they had seen little impact from the stockpiling plan as the 1 million tonnes, equivalent to 2 million tonnes of unhusked rice, made up just 20 percent of the winter-spring crop. ($1=19,060 dong) ($1=32.68 Baht)

Vietnam Rice Price

The Vietnam Food Association revised the Minimum Export Price (MEP) for 5 percent broken rice to $420 per ton (FOB basis). However, the actual offered prices from exporters were lower than the MEP, due to the lack of demand after the Lunar New Year and the fact that the Mekong River Delta's Spring harvest is approaching. Local paddy prices also dropped in the Mekong River Delta last week, due to limited export demand and the on going harvest of the Spring rice crop in the Mekong River Delta.

Malaysia to import more rice from Pakistan

Malaysia is expected to register a four- fold increase in the import of Pakistani rice this year, says the Commercial Counsellor at the Pakistan High Commission in Kuala Lumpur, Wijiuallah Kundi. In a statement here today, he said Padiberas Nasional Bhd (BERNAS) and its group of companies, have been actively engaging Pakistan to bring about the increase. The move is in line with the objective of diversifying Malaysia's import base for rice and minimise the dependence on imports from Thailand and Vietnam. Wijiuallah said Malaysia's rice imports from Thailand and Vietnam made up 45.91 per cent and 34.5 per cent, respectively. "Currently, Pakistan is the third biggest exporter of rice to Malaysia. But this is only 4.1 per cent of the total rice imports," he added. The rice products from Pakistan are Basmati rice including Super, Shaheen, Kernal, NIAB, IRRI-9, IRRI – 6, broken rice, rice in the husk, paddy husked or brown rice, both semi-milled or wholly milled. In 2008, Pakistan's total rice exports to Malaysia was valued at RM110.97 million

Vietnam’s first-quarter rice exports may drop 25 pct

Rice exports from Vietnam, the world’s second-biggest exporter, may drop 25 percent to 1.2 million tons in the first quarter as foreign buyers reduce orders on expectations that prices will decline. “Falling commercial demand slowed our exports this quarter,” said Truong Thanh Phong, chairman of the Ho Chi Minh City-based Vietnam Food Association. “Foreign buyers expect that our prices will drop further but we expect orders will start to pick up from May.” Vietnam is trying to boost exports as production declines in other key producers so that it can reach an economic growth target of 6.5 percent this year, from 5.3 percent last year. The country last year shipped a record 6 million tons of rice, making the grain the sixth-biggest foreign exchange earner. It plans to ship a similar amount this year, Phong said. “Demand for rice from buyer countries was low and they also wanted to wait and see what the output levels were in producing countries,” said Nguyen Hieu Tam, head of rice research at Vietnam Market Analysis & Forecast Joint-Stock Co., a Hanoi-based research company for agricultural products. “Some African buyers also had financial difficulties in buying our rice,” she said Tuesday. Output in major producers including India and Indonesia may slow because of El Nino, Tam said by phone. The Philippines lost 298,852 tons or rice as of March 1 because of El Nino, the country’s Department of Agriculture said. The weather phenomenon is caused by a warming of the equatorial Pacific Ocean and parches crops in Asia. Bumper harvest Thailand’s rough rice harvest may decline 15 percent in the year that began Oct. 1 because of El Nino, the country’s Office of Agricultural Economics said on Jan. 13. Thailand is the world’s biggest rice exporter. Vietnam, meanwhile, produced a bumper winter-spring harvest, Tam said. The Vietnam Food Association’s Phong forecast in November that prices would surge 50 percent to about $800 a ton by the end of the second quarter this year on increasing demand and unfavorable weather conditions. The country’s average export price from Jan. 1 to Feb. 28 was $473 a ton, according to the association’s Web site. Rice futures traded in Chicago have dropped 12 percent this year, compared with a 22 percent slump in the same period last year. The most-active contract gained 0.6 percent to $13.17 per 100 pounds at 5:35 p.m. in Singapore. The price climbed to a record $25.07 in April 2008. Foreign warehouses The Vietnam Food Association is asking its 30 member companies to buy 1 million tons from farmers for stockpiling after prices dropped in the Mekong Delta, according to a report on the group’s Web site. The Mekong Delta is Vietnam’s main rice producing region. More than 300,000 tons have been bought under this plan, Tuoi Tre newspaper reported Tuesday, citing Pham Van Bay, the group’s vice chairman. The Southeast Asian nation also plans to start construction of a rice processing plant and warehouse in Cambodia by the end of the second quarter to support exports, according to Nguyen Tho Tri, deputy director of the Vietnam Southern Food Corp, which also has a stake in the project. Another stockpiling warehouse will be built in the Philippines this year, he said, declining to give further details.

Thai Rice committee to seek urgent price solutions

The National Rice Policy Committee will hold an urgent meeting today seeking measures to alleviate falling rice prices that have prompted farmers to demonstrate, Commerce Minister Porntiva Nakasai yesterday said. Rice farmers recently marched to the ministry to protest against lower rice income. In many provinces, they are suffering from falling rice prices and have been protesting for the past month. They want the government to reinstate the pledging scheme and increase the guaranteed price from Bt10,000 a tonne to Bt12,000. However, Porntiva said the government would not put the pledging scheme back in place, because it had deteriorated the market prices. "The government may increase opportunities to purchase rice directly from farmers. It will proceed with the guaranteed-income measure, because it is the most efficient way to increase sustainable incomes for farmers, plus it supports market mechanisms," said Porntiva, adding that if the guaranteed price were set too high, it would destroy market mechanisms and cause problems for exporters. She also said the protests in some areas were not caused by falling prices, but rather by traders encouraging the protesters in a bid to pressure the government to reinstate the pledging scheme. These traders have lost revenue from the guaranteed-price project. Traders and rice millers prefer the pledging scheme because they received revenue from rice polishing and warehouse rental fees for storing government rice. The Commerce Ministry said it was able to purchase only 1,000 tonnes of rice directly from farmers over the past week. Six million tonnes of paddy rice are expected in the second crop's harvest season. In addition, ministry permanent secretary Yanyong Phuangrach said he had ordered officials to inspect the quality of the rice entering the government's buying project. The ministry has reported some traders have mixed low-quality Vietnamese rice with the Thai rice to obtain a higher selling price. Vietnamese rice is quoted at only US$365 (Bt11,900) per tonne, while Thai rice is trading at $500 a tonne. Mixing in Vietnamese rice has destroyed the quality of Thai rice, Yanyong said.

Bangladesh to tender for 50,000 tonnes of rice

Bangladesh's state grains buyer will tender this week to buy 50,000 tonnes of parboiled rice to replenish food reserves, a food official said on Tuesday. Bangladesh, the world's fourth biggest rice producer, plans to import 300,000 tonnes of rice in the current fiscal year to the end of June. "We are going to issue an international tender soon to buy 50,000 tonnes of rice to shore up our stocks," said an official of the Directorate General of Food who declined to be quoted because he is not authorized to speak to the media. Market sources said it could be part of a government move to build food reserves after failing to procure enough rice locally. Rice prices have risen over the past few months despite good crops and healthy levels of stocks. Bangladesh is buying 25,000 tonnes of white rice at $395 per tonne from the Singapore-based Indo-Sino Trade Pte Ltd in an international tender. Indo-Sino also made the lowest offer at $388.92 a tonne in another Bangladesh tender to buy white rice that closed on Sunday. In January, the government extended a ban on rice exports until June to curb price increases and ensure availability of the staple in the domestic market. At that time, the government also started open market sales of rice in the capital and adjoining districts to hold down prices. The south Asian country produces around 30 million tonnes of rice, normally enough to feed its 150 million people, but often requires imports to cope with shortages due to natural calamities such as floods and droughts. Bangladesh had to import rice worth $800 million in 2008.

China Rice report

Production Total rice production is estimated at 196 MMT (unmilled) in MY 2009/10, up three percent from the previous estimate and two percent from the previous year, mainly attributed to record yields of early season Indica in southern China. Total estimated planted area is 29.5 million Ha, up one percent from the previous year and unchanged from the previous estimate. Early-season rice production is estimated at 33 MMT, 1.5 MMT higher than previous year. Because of favorable weather conditions, early season Indica rice yield reached a record high of 5.7 MT/Ha in MY 2009/10. Except for Heilongjiang Province, all major rice producing provinces reported an above average yield for late season Indica rice and Japonica rice. In Heilongjiang Province, the Japonica rice yield and quality was damaged by low temperatures and excessive rainfall in June and July. Rice production for MY 2010/11 is forecast at 197 MMT, up one percent from the previous year, assuming average yields. Acreage is forecast to rise one percent from the previous year. The central government's price support program (see Policy section) has guaranteed reasonable returns for rice farmers. Consumption MY 2009/10 overall rice consumption is estimated at 134.5 MMT (milled), up three percent from the previous estimate and one percent from the previous year. For food consumption, traditionally, Indica rice is favored by consumers in southern China while Japonica rice is favored in northern China. As discussed in the wheat section, surveys show per capita in-house grain consumption (including rice and wheat) declined gradually over the previous years and this trend is projected to continue. In addition to food use (for human consumption), low quality early rice varieties and stale or rancid rice reserves are used to feed swine and poultry in both commercial farms and rural households. High corn prices in MY 2009/10 resulted in a greater proportion of both rice and wheat being used for animal feed use. While there is no reliable data on feed rice use, Post estimates that approximately 11 MMT of rice (unmilled) was used for feed in MY 2009/10. Source: World Trade Atlas Trade Rice imports in MY 2009/10 are estimated at 300,000 MT, and forecast to increase 10 percent to 330,000 MT in MY 2010/11. Most imports are Thai fragrant rice varieties, which are consumed in hotels or restaurants in more affluent coastal cities or by high income populations. Such imports are expected to continue to rise in tandem with increasing consumer incomes, making Thai rice more affordable. However, traditional dietary habits still persist in most of China and the average consumer still favors local rice varieties as a staple food. Rice exports in MY 2009/10 are estimated at 850,000 MT, 8.5 percent higher than the previous year. China’s exports of rice in MY 2010/11 are forecast to increase to 900,000 MT. The steady rise in exports could be attributed to improved management on rice quality at processing plants. Due to geographical proximity and Japanese rice processing investment in China, nearby Asian markets such as Japan and Korea favor China’s Japonica rice varieties from the northeast. Prior to 2008, China exported low quality Indica rice to African countries and traders benefited from a 13 percent VAT export rebate. In 2008, the GOC removed the VAT rebate to discourage exports of rice and other grains. However, China continues to export a small but highly profitable volume of Japonica varieties to Japan and South Korea. Exports are subject to a quota levied by the importing country and no substantial increase is expected, but the current volume is forecast to continue over the next two years. Stocks While official national reserve data are not available, Post estimates ending stocks for MY 2009/10 at 41 MMT (milled), and forecasts they will grow to 43 MMT in MY 2010/11, given the six most recent years of production increases.

Rice futures commentary

Rice futures ended slightly stronger in a rebound from heavy recent losses. It seems the market is “trying to stabilize” following recent sell-offs, a floor trader says. Market participants tried to press down prices overnight but then bought the market in early dealings, he says. The bounce came after sharp losses earlier this month. May rice as of Friday’s close was down $1.33, or 9.7%, for the month. Prices rose Friday amid “lackadaisical activity” in neighboring grain markets, a trader says. CBOT wheat ended up in light trading, while CBOT corn and soybeans stumbled. The grain markets sometimes look to each other for direction. Wheat and rice are related because both are global food staples. May rice ended up 3 cents at $12.43 per hundredweight.

Vietnam expects bumper rice harvest

World's second largest rice exporter, Vietnam is all set to harvest its winter-spring rice crop amid sharp drop in local prices.

The current crop, the biggest of Vietnam's annual three, is a key part of export aims of 5.5 million to 6.2 million tones this year, compared to a record 6 million tones last year when the winter-spring harvest produced a record 10.4 million tones.

Vietnam Food Association however urged its members, mainly exporters, to buy 1 million tones of milled rice equivalent to 2 million tones of unhusked grain from a winter-spring harvest forecast at a near record 10 million tones, and keep it off the export and local markets for at least two months.

It said an export price floor at $440 a tone, free-on-board for 5 per cent broken rice and $420 a tone for the 25 per cent broken rice remained unchanged.

The stockpile decision was reached at an industry meeting here as export prices have dropped around 8 per cent this week from before the week-long Tet holiday on a lack of demand during harvest.

Last year, exporters placed nearly 1.5 million tones of rice in warehouse stockpiles apart from ordinary purchases and food association members bought nearly 1 million tones in August and September.

Country's top exporter Vinafood 2 held another 500,000 tones between last November and January 20, 2010.

The grain was not for domestic market sales and traders said quality has now worsened while buying demand remains thin.

Exporters in Thailand said they feared buyers may default on contracts already in place after prices fell for the fourth-straight week and were considering stockpile plans as well.

Sluggish rice trade dampens Veitnam local price

Sluggish rice trade in the year to date has driven local exporters from buying local rice, sending the local rice price into a downward spiral while harvest is peaking in the Mekong Delta as the country’s main granary.

Food traders refuse to buy rice despite being told to do so by the Vietnam Food Association (VFA), while farmers in the Mekong Delta are seeing the rice price to crash to under the suggested floor price of VND4,000 a kilo.

Stagnant trade

In the first two months of the year, only some 700,000 tons of rice has been shipped abroad, and the export volume for the first quarter is expected at 1.1 to 1.2 million tons compared to 1.6 million tons in the year-ago period. Therefore, despite better export price this year, the local price has hit farmers harshly.

In the Mekong Delta, rice supply is awash. Apart from some one million tons of rice carried over from last year, the commercial volume in this winter-spring crop is estimated at three million tons, which may rise to four million tons in the first six months of the year, according to VFA.

Until now, food traders have been able to sign contracts for 2.5 million tons, mostly under government-to-government agreements.

The vision for the rice trade is still blurred, said Pham Van Bay, vice chair of VFA.

The Philippines has signed agreements to buy 1.6 million tons of rice from Vietnam, but it is uncertain whether this country will order more, Bay said, adding that the situation is similar with other major buyers like Indonesia and India.

“Vietnam’s rice trade is locked in uncertainties this year, as major buyers are keeping a wait-and-see attitude,” Bay said.

A research institute under the agriculture ministry has called for measures to diversify markets if Vietnam is to boost rice trade and to lessen its reliance on traditional buyers. There should be a new mechanism that encourages food traders to look for new markets and new buyers, said the Institute for Development Strategy for Agriculture and Rural Development

Rice price tumbles

In fact, the local rice price has crashed by VND1,500 a kilo from two months ago, and VND500 since after Tet. Low-grade unhusked rice is now selling for some VND3,800 a kilo, while better-quality rice goes for between VND4,100 and VND4,500 a kilo.

Earlier, VFA has set the floor price at VND4,000, and this level was reiterated at a meeting of VFA in An Giang Province on Tuesday.

VFA has picked out 30 local food traders mandated to buy rice from farmers for stocking, but all these enterprises have been reluctant to make a move. Traders dare not buy rice at this time for fear of losses as they expect the price will fall further.

At the meeting on Tuesday, food traders said they were awaiting the final say from the Finance Ministry on the floor price. As food exporters are not ready to buy, intermediary agents also shun from buying rice despite prices are falling sharply.

Pham Van Bay of VFA said the association would conduct an inspection into the rice trade, and any of the food traders who ignore their mandate to buy rice would be disciplined, or even excluded from the association, according to Tuoi Tre. Under current practices, only members of the association are allowed to engage in the rice export business.

Thailand Rice Price - Weekly

Domestic and export prices continued their downward trend. However, the strengthening Thai baht to 32.7 baht/$ from 33.0 baht/$ and last week’s tender cancellation of 501,849 tons of MY2007/08 – MY2008/09 intervention stocks prevented further price declines. The Government has suspended any plans of future stock releases due to mounting concerns of sharp reductions in domestic prices, particularly as new second-crop supplies are coming into the market. In addition, the Government will implement the direct purchase program, a measure instituted last year to stabilize domestic prices in which the Government bought white rice paddy(700 tons out of an allowance allowance of 2.0 million tons) up to the point where benchmark prices surpassed insurance prices.

This direct purchase program is being financed through the Bank for Agriculture and Agricultural Cooperatives (BAAC), which will provide a credit line of 20 billion baht ($606 million) to the Public Warehouse Organization (PWO) and the Marketing Organization for Farmers (MOF) to purchase paddy from farmers at benchmark prices. Benchmark prices of 5% grade white rice paddy are currently at 9,074 baht/ton ($275/MT).

The biweekly benchmark prices of MY2009/10 second-crop white rice for March 1-15, 2010 were lower than the previous period, as such farmers who sell in this period will receive a higher compensation. Further reduction in benchmark prices is unlikely as the government will have implemented the direct purchase program which will help stabilize domestic prices.

Bangladesh To Import 25,000 Tons Of Rice From Myanmar

Bangladesh is going to import 25,000 metric tons of sunned rice from Myanmar to meet the growing demand for the essential item in the local markets, officials said on Sunday.

The decision was taken at a meeting of the cabinet committee on public purchase held in the capital, Dhaka with Finance Minister AMA Muhith in the chair.

The government wants to ensure sufficient rice supply in the market, Food Minister Abdur Razzak told reporters after the meeting, adding that the government is also considering a proposal to soon import 5 million metric tons of rice.

Singapore-based Indo-Sino Trade Limited was awarded the contract to supply the bulk rice from Myanmar at the low bid rate of US$395 a ton.

The country's total production target of food grains during fiscal year 2009-10 (FY10) has been primarily fixed at 35.051 million metric tons. The actual production of food grains during FY 09 stood at 32.166 million metric tons.

Imports of food grains between July 2009 and January period ostood higher at 2.135 million metric tons, compared to 1.459 million metric tons in the same period the previous year, according to the central bank statistics.

However, stock of food grains including transit stock with the government stood lower at 1.051 million metric tons at the end of January compared to 1.308 million metric tons at the end of January 2009.

India Wheat, rice stocks swell; exports possible

India's wheat and rice stocks more than doubled as at March 1, government sources said on Monday, indicating the country's ability to
free some stocks for exports and open market sale.

Stocks of wheat were at 18.4 million tonnes, sharply higher than a target of 8.2 million tonnes, while that of rice were at 26.9 million tonnes compared with a targeted 11.8 million tonnes.

Bulging stocks and prospects of a bumper wheat crop in 2010, the fourth in a row to exceed demand, have raised concerns about storage.

Farm Minister Sharad Pawar last week said a panel of ministers led by Finance Minister Pranab Mukherjee would meet this week to discuss lifting of a ban on exports of wheat and common grades of rice.

Analysts say India must export more wheat to accommodate the new crop to be harvested from March 10. The country has already allowed state-run firms to ship small quantities of wheat and regular grades of rice to neighbours Sri Lanka and Nepal.

India, the world's second-biggest producer of wheat and rice, buys grains from domestic farmers to run various welfare programmes, protect farmers from distress sale, and meet emergency needs.

India has No immediate plans to import rice, says Scindia

The government Monday said it can import rice only if there is a shortfall in procurement from farmers but it has no immediate plans to import.

'The government has no immediate plans to import rice. We may do so if there is shortfall in rice procurement,' Minister of State for Commerce and Industries Jyotiraditya Scindia told parliament.

'There is no proposal to lift a ban on non-basmati rice exports either,' the minister added.

India is the second largest producer of rice and wheat. According to government estimates, rice production is expected to fall to 87.56 million tonnes from 99.18 million tonnes a year earlier.

The government has banned export of non-basmati rice since October 2007 to ensure its availability in the domestic market.

India's exports of basmati rice between April and September 2009 touched over Rs.62 billion ($1.4 billion), Scindia said.

Overview of Saudi Arabia’s Rice Market

No rice is produced in the Kingdom. Saudi rice imports in calendar year (CY) 2010 are forecasted to increase by 4 percent to about 1.1 MMT. Rice and wheat are basic staple foods in Saudi Arabia and consumption of both is expected to grow significantly in the next few years due to an annual population growth rate of 3 percent and the increasing number of Ummra visitors and pilgrims coming to Mecca. More than five million pilgrims come to Mecca each year to perform Ummra and Hajj rituals. Also, the Saudi government procures rice locally for food donations to nearby countries affected by natural disasters.

1. Rice Imports

With an estimated 55 percent market share in CY 2009, India has continued to dominate the Saudi rice market, followed by Thailand (16), Pakistan (14%), and the U.S. 11 percent. During the past years, India benefited most from the shift in Saudis and expatriates consumers' rice consumption preferences which have shifted from long grain white Basmati rice to long grain parboiled or sella or muzza Basmati rice. Saudis and expatriates rice consumers prefer parboiled rice over the traditional long grain white rice since it is easier to cook. Except for Thailand, all major rice supplying countries rice exports to Saudi Arabia were reduced significantly in 2009. Indian rice exports to Saudi Arabia for the first seven months of CY 2009 declined by 19 percent to 428,958 MT compared to the same period last year. Thai benefited from the Indian decreased exports by increasing its rice exports to Saudi Arabia by the same percentage or 19 percent in the same year (174,184 MT vs. 135,286). Pakistani rice exports for January-June 2009 dropped by 45 percent to 87,549 MT compared to the same period in 2008. Similarly, U.S. rice exports decreased by 13 percent in 2009 compared to 2008. Domestic rice importers anticipate that their purchases of U.S. rice could decrease significantly in CY 2010 if the up to $200 price differences between Thai and U.S. long grain parboiled rice reported in February 2010 continues for the rest of the year. Saudi rice trade acknowledges the superior quality of U.S. rice compared to Thai long grain parboiled rice but realizes that a significant number of local consumers are unable to ascertain the difference between the two varieties. Sources allege that illicit traders often pass off Thai rice or Indian low quality rice as American rice by bagging in bags associated with U.S.-origin product. This practice has been going on for several years and has proven difficult to stop. The local availability of dozens of brands of Basmati and non-Basmati rice mainly from India and to some extent from Pakistan has greatly increased competition for U.S. branded rice products. At present, there are less than ten U.S. brands on the Saudi market.

Below are prices per metric ton for different rice variety imported from major supplying countries as of February 2010
Type of Rice and C&F Price in U.S. Dollar per MT Jeddah Port
Indian Sella Basmati $1350
Indian Sella Pusa $950
Pakistani Parboiled IRRI $630
Thailand Parboiled $680
U.S. Parboiled $800-850

2. Saudi Government Lifts Rice Import Subsidy On November 24, 2009, the Saudi government removed the 266.67 per metric ton rice import subsidy program, which it established in December 2007 to alleviate the financial burden on consumers caused because of the sharply rice prices increase. The government indicated that it removed the rice subsidy scheme as foreign rice exporters took advantage of the import subsidy to keep import prices high. Saudi rice importers have reported that a number of major rice exporters exploited the Saudi government’s rice import subsidy program to keep import prices high despite the significant decline in world rice prices that began in mid 2008 which prevented them to pass savings to domestic consumers.

Global rice trade to rise by nearly 6%

Bangladesh is forecast to increase imports to 700,000 tonnes this year from 145,000tpmmes in 2009 due to reduced production and increased consumption, the IGC said.

Global rice trade will likely to rise by nearly 6% this year, to a three-year high of 30 million tonnes, the International Grains Council has said.



A recent report of the Council said that rice trade would be higher than the five-year average due to a rebound in shipments to Asia Deliveries to Far East Asia are forecast to rise 20%, to 8.1 million tonnes, due to strong imports by Bangladesh and the Philippines.


Bangladesh is forecast to increase imports to 700,000 tonnes this year from 145,000tpmmes in 2009 due to reduced production and increased consumption, the IGC said.


Due to a rise in shipments by Thailand and Pakistan, total exports by the five leading exporters of rice including Vietnam, India and the U.S. is projected to rise 7% by 24 million tonnes.

Vietnam Likely To Export 6 Million Tonnes Rice In 2010

Vietnam likely to export 6 million metric tonnes of rice this year, down from 6.05 million tonnes last year mentioned by Vietnam Food Association.

The association said the country plans to export 1.2 million tonnes in the first quarter, 2 million tonnes in the second quarter, 1.5 million tonnes in the third quarter and 1.3 million tonnes in the fourth quarter.

Myanmar rice

Rice: High quality rice price increased by about K1000 per bag (49 kilograms or 108 pounds) while the low-quality rice is stable. The high-quality rice price increased because some traders had begun stockpiling quantities for sale later in the year, so less rice was making its way to the market, said a spokesperson from Shwe War Mandaing rice warehouse. High-quality rice increased to between K24,000 and 24,500 per bag from K23,000; low-quality rice was stable at about K17,000 a bag.

India Govt to consider exports of grains

India, sitting on a huge stockpile of grains, will soon discuss lifting a ban on exports of wheat and common grades of rice, the farm
minister said on Thursday. Sharad Pawar told reporters a panel of ministers headed by Finance Minister Pranab Mukherjee would meet next week to discuss the issue as the country has the ability to export grains. "This will be discussed in the next meeting. We have to a take a definite view," he said.
India, the world's second-biggest wheat producer, recently approved the sale of small quantities of wheat from government stocks to neighbouring Nepal. Government officials last month said the country would sell an additional 200,000 tonnes of wheat to Nepal, despite a ban on overseas sales of the grain, and may supply limited quantities of rice to Bangladesh.

On Feb. 1, stocks of wheat at warehouses were at 20.6 million tonnes, up 22.6 percent from a year earlier, while that of rice rose 26.7 percent to 25.6 million tonnes. The government banned exports of wheat in early 2007 and prohibited overseas sales of common rice varieties in 2008.

India allows some rice exports to Nepal, Sri Lanka

India has allowed exports of 20,000 tonnes of non-basmati rice to Sri Lanka and 25,000 tonnes to Nepal, the government said in a statement on Wednesday, partly lifting the ban on shipment of regular grades.

Exports would be allowed through two state-run companies, said the Directorate General of Foreign Trade, an arm of the commerce ministry, in an order.

PEC Ltd has been allowed to export rice to Sri Lanka, while MMTC Ltd will ship it to Nepal.

India, the second biggest producer of rice in the world, banned non-basmati rice exports in 2008 to ensure smooth domestic supplies.

The decision to allow a limited quantity of the non-basmati rice reflects the federal government's confidence of a healthy rice stocks, despite a high level of food inflation.

India's food price index rose 17.58 percent in the 12 months to Feb. 13, the government said last week. The rise was lower than an annual rise of 17.97 percent in the previous week.

Tahi Farmers Urge Govt to Solve Declining Rice Price

The Thai Rice Mills Association has arranged to have rice mills in seven northern provinces of Thailand buy rice from farmers at fair prices, while farmers in Kamphaeng Phet Province held a protest to demand that the government address the problem of declining rice prices.

Two hundred farmers from Kamphaeng Phet Province gathered in front of the entrance of the province's administrative office and submitted their petition to PM Abhisit Vejjajiva through the provincial governor.

They urged the government to solve declining rice prices. The provincial security officers were present to prevent a third hand from using the gathering to stage violence.

The protest leaders took turns delivering speeches, criticising the government for how ineffective its price guarantee program has been.

The farmers said they are able to sell a ton of rice at 5,500 to 6,000 baht, while the standard price announced by the government is 10,000 baht per ton and the reference price is at 9,997 baht per ton.

They revealed that after selling the rice they receive only three baht in subsidy per ton of rice they sell, while the middlemen, their only other option, offer to buy their produce at even lower prices.

Provincial authorities assured the farmers that their plight will be forwarded to the government immediately.

In Pichit Province, Thai Rice Mills Association Deputy Chairman Banjong Tangjitwattanakul said rice millers in seven northern provinces including Pichit, Phisanulok, Utaradit, Sukhothai, Kamphaeng Phet, Phetchabun, and Nakhon Sawan held a meeting to find a solution to the dropping rice price.

Eight to ten rice mills in each province have agreed to act as agents to buy rice from the farmers at reference prices, in order to stabilise the price of rice and prevent it from declining further.

Banjong attributed the declining rice price to premature price cuts by the rice exporters.

He proposed that the government adjust the reference price for rice more frequently, in order to stay up to date with the market price.

Currently, the reference price for rice is adjusted once every fifteen days.

Indonesia to Export Rice in 2010

Minister of Agriculture Suswono said that this year Indonesia have the opportunity to export rice because, according to data from the Central Statistics Agency (BPS), harvest production this year is increasing.

“We will prioritize the export of premium quality (rice),” said Suswono yesterday.

He will forbid the export of medium quality rice because it is widely consumed in the country.

Medium quality rice will be prioritized for national rice reserves.

But, according to him, the government could open export of medium quality rice.

“If rice reserves reach 1 million tons, we might export medium quality rice too,” he said.

Right now, according to Suswono, national rice reserves are 400,000 tons.

Head of the Central Statistic Bureau (BPS) Rusman Heriawan said he was optimistic that Indonesia could still maintain rice self-sufficiency and fulfill domestic rice needs.

“Rice self-sufficiency can still be maintained until this year,” said Rusman on a separate occasion.

Vietnam wins new bid to sell rice to Iraq

The Northern Food Corporation (Vinafood 1) has won a bid to sell 90,000 tonnes of 5 per cent broken rice to Iraq, according to a statement made by the company yesterday, March 1.

The new bid brings the total amount of rice to be exported by Vinafood 1 to Iraq between March and May to 150,000 tonnes.

In October 2009, Vinafood 1 and the Viet Nam-Iraq joint-venture specialising in rice processing and exports won another bid to export 60,000 tonnes of high-quality rice to Iraq. The new bid is expected to help the company purchase more paddy from the winter-spring crop at higher prices from local farmers. Members of the Viet Nam Food Association (VFA) are scheduled to meet in southern An Giang Province today to discuss plans to promote rice exports in 2010.

VFA said Viet Nam exported only 350,000 tonnes of rice in February, which was a drop of 45 per cent from the same period last year. Export rice contracts have decreased recently as importers were waiting for a price reduction.

"However, export potential is still brighter than it was at the end of last year," said VFA's vice chairman Pham Van Bay.

"Viet Nam will execute the contract to ship 1.85 million tonnes to the Philippines in the coming months.

The Philippines will also purchase 600,000 tonnes by the end of March and 200,000 tonnes will be purchased by private companies," he said.

Recently, the Prime Minister directed the Ministry of Finance to buy 50,000 tonnes of rice for the national food reserve in 2010 and to stabilise the price on the market.

Last Thursday, the VFA also asked its 30 member enterprises to purchase 1 million tonnes to put in reserves to stabilise the price of rice in the Mekong Delta region.

Vietnam price update

Rice price offers dropped slightly since the market was inactive because of the Lunar New Year Holidays. Local paddy prices declined in the Mekong River Delta last week due to limited export demand and the harvest of the Spring rice crop started right after the Lunar New Year.

Bangladesh Grain and Feed

Assuming normal weather conditions, Bangladesh‟s foodgrain production in MY 2010/11 is forecast at 33.3 million tons (32.3 million tons of rice and 1.0 million tons of wheat), up by 2 percent from the current MY 2009/10 productions. Imports of foodgrains are forecast at 400,000 tons of rice and 2.5 million tons of wheat. Bangladeshi importers are currently sourcing their wheat from other origins due to an Indian ban on wheat exports.

Rice consumption (food, seed, and feed use together) in MY 2010/11 is forecast at 33 million tons assuming a stable wheat supply situation in the Country. Consumption in MY 2009/10 is estimated at 32 million tons up by around 3 percent from MY 2008/09 consumptions. Bumper rice productions in consecutive seasons resulted in a very good stock of rice at government and traders level. The average wholesale price of coarse rice was Taka 21750 (US $320) per ton in December 2009, as compared to Taka 24590 (US $362) in December 2008. The declining trend of rice price since the beginning of MY 2008/09 continued until October of the current MY 2009/10 when the price of rice started to rise. Rice price in January, 2010 marginally crossed the last year‟s price level at this time. The current rising trend of rice prices is unprecedented especially after the harvest of a good Aman rice crop.

Based on the current production forecast, and considering the large carryover stocks held by the farmers, traders and the government, rice imports in MY 2010/11 are forecast at 400,000 tons.
Rice imports in MY 2009/10 are estimated at 400,000 tons (comprising of 200,000 tons public sector imports and the rest private sector imports) as compared to 602,000 tons in MY 2008/09. On a calendar year basis, rice imports in 2009 are estimated at 146,000 tons as compared to 1.68 million tons in 2008, the year heavily affected by crop losses due to cyclones and floods.

Public sector beginning stocks of rice in MY 2009/10 are estimated at 1.15 million tons. In addition to these, stocks of about 8 million tons of rice are estimated to be carried over with the farmers and the traders. However, these private stocks are not included in the PS&D table. The government‟s rice procurement target for MY 2009/10 is 1.5 million tons, as compared to last year‟s actual procurement of 1.45 million tons. The government held stock as on December 31, 2009 was 983,000 tons as compared to 842,000 ton on December 31, 2008. The MY 2009/10 target of public distribution of rice is 1.8 million tons comprising of 1.1 million tons free distribution in kind to the rural vulnerable population and 700,000 tons sales at subsidized prices. Actual distribution of rice by the government was 1.76 million tons in MY 2008/09 out of which about 80 percent was free distribution in kind and the rest was subsidized sales.

Rice imports into Bangladesh are currently duty free. There is no quantitative restriction on rice imports. A ban on export of rice has been in force since May 2008.

Thailand Rice Price

Domestic and export prices were significantly lower in response to the Department of Foreign Trade’s retender of 501,849 tons of MY2007/08 – MY2008/06 intervention stocks for exports.

Thai Government Re-Issues Rice Tender

After cancelling the January 21, 2010 rice tender destined for exports, the Government re-issued a tender on February 22 for March – July 2010 delivery, despite controversy among politicians, millers, and farmers on concerns that this measure
would add downward pressure to declining domestic prices. This month alone, domestic prices for 5% grade white rice have declined by 7-10 percent from levels of 17,200 baht/ton ($521/MT).

The retender will include 501,849 tons of old-crop intervention stocks from MY2007/08 – MY2008/09, of which 350,206 tons are 5% grade white rice, and 151,643 tons are Pathumthani fragrant rice for export only. Initial bidding prices are expected on February 23. Under the tender’s terms, if offers are not suitable, the Government has the right to renegotiate until it deems that a reasonable price
has been attained. As a reference point for prices, the Government will use the current market price minus an amount attributed to the stock’s “depreciation”, which shall be calculated using a pro-rata discount rate of 5– 50 percent.

It is expected that fewer exporters will participate in the tender, as many believe contracts are unlikely to be awarded. Bidding prices are expected to be lower than the Government’s reference prices (current market price minus “depreciation”).

Vietnam expects bumper winter rice harvest

World’s second largest rice exporter, Vietnam is all set to harvest its winter-spring rice crop amid sharp drop in local prices.

The current crop, the biggest of Vietnam's annual three, is a key part of export aims of 5.5 million to 6.2 million tones this year, compared to a record 6 million tones last year when the winter-spring harvest produced a record 10.4 million tones.

Vietnam Food Association however urged its members, mainly exporters, to buy 1 million tones of milled rice equivalent to 2 million tones of unhusked grain from a winter-spring harvest forecast at a near record 10 million tones, and keep it off the export and local markets for at least two months.

It said an export price floor at $440 a tone, free-on-board for 5 percent broken rice and $420 a tone for the 25 percent broken rice remained unchanged.

The stockpile decision was reached at an industry meeting here as export prices have dropped around 8 percent this week from before the week-long Tet holiday on a lack of demand during harvest.

Last year, exporters placed nearly 1.5 million tones of rice in warehouse stockpiles apart from ordinary purchases and food association members bought nearly 1 million tones in August and September.

Country’s top exporter Vinafood 2 held another 500,000 tones between last November and January 20, 2010.

The grain was not for domestic market sales and traders said quality has now worsened while buying demand remains thin.

Exporters in Thailand said they feared buyers may default on contracts already in place after prices fell for the fourth-straight week and were considering stockpile plans as well.

Thailand agrees with RP on rice, to ratify Atiga

THAILAND, the world’s largest rice exporter, plans to ratify a regional agreement to lower tariffs on most goods after resolving a dispute with the Philippines over rice duties.

Thailand will be allowed to sell as much as 367,000 tons of duty-free rice a year through 2014 to the Philippines, which will maintain a 40-percent import tariff until 2015, Alongkorn Ponlaboot, Thai deputy commerce minister, said at a meeting of economic ministers from the 10-member Association of Southeast Asian Nations.

“We informed the meeting that we’ve concluded our negotiations on rice,” the minister said in an interview in Putrajaya, Malaysia. Ratification of the Asean Trade in Goods Agreement (Atiga) “should be in time for the next Asean Summit in April,” he said.

Asean is attempting to create an economic zone modeled after the European Union, without a common currency, by 2015.The group has said it needs to integrate more closely to gain more investment from China and India, the world’s two fastest-growing major economies.

Thailand is aiming to export 9 million to 9.5 million tons of the rice this year, an increase of as much as 11 percent, according to the Department of Foreign Trade.

The Asean free-trade area, which came into force January 1, removes tariffs on more than 87 percent of imports. The bloc’s richest six members implemented the tariff eliminations, while the rest, which are less developed, will follow later.

Asean includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Philippines may allow private firms to import more rice

The Philippines may allow private firms to import up to 150,000 tons rice on top of a previous allocation of 200,000 tons due to increased interest, a government official said on Monday.

"NFA is considering additional quantity of 100,000 to 150,000 tons for private sector importation due to the overwhelming response from them," Rex Estoperez, spokesman for the state-run National Food Authority (NFA), told Reuters.

Global Rice Trade Likely 30 Mln Tons In 2010, Up 6%

The global trade in rice will likely rise 6% this year, to a three-year high of 30
million metric tons, the International Grains Council said.
The trade is expected to be higher than the five-year average due to a rebound in
shipments to Asia, the council said in a recent report.
Deliveries to Far East Asia are forecast to rise 20%, to 8.1 million tons, due to
strong imports by Bangladesh and the Philippines.
Bangladesh is forecast to increase imports to 700,000 tons this year from 145,000
tons in 2009 due to reduced production and increased consumption, the IGC said.
In the Philippines, heightened worries about domestic supplies following crop
damage due to two typhoons in quick succession last year prompted the National Food
Authority, or NFA, to purchase 1.82 million tons late last year for 2010 delivery.
With the government expecting to buy more, imports by the Philippines are forecast
to rise 34%, to 2.6 million tons, in 2010, the IGC said. The NFA was recently
given approval to import more than 3 million tons if necessary, to compensate for
any weather-related crop losses.
Imports by Indonesia, a major buyer in recent years, are forecast to be unchanged
at 300,000 tons in 2010, while shipments to Malaysia will also remain steady, at
900,000 tons.
Due to a rise in shipments by Thailand and Pakistan, total exports by the five
leading exporters of rice including Vietnam, India and the U.S. is projected to rise
7% by 24 million tons.
Government procurement and strong international competition resulted in a
steep decline in Thailand’s rice exports last year. The government is now offering 2.0
million tons of old crop stocks to exporters in 2010 but an auction to sell 375,000
tons in January was unsuccessful.
If price quotations are competitive, Thailand’s rice exports may rise to 10 million
tons this year and drag down shipments from neighboring Vietnam.
Despite large sales to the Philippines, rice exports by Vietnam are likely to fall
8% to 5.5 million tons. Due to restrictions in exports by India, shipments by neighboring Pakistan are likely to rise to 3.3 million tons from 2.7 million tons.
There was a marked increase in South America’s rice exports in 2009 to 2.1 million
tons but these levels are unlikely to be sustained this year and may decline to 1.8
million tons, though they will still be above the historical average, the council said.