The 2014 Louisiana rice crop is better than we expected "but not as good as last year," said Johnny Saichuk, LSU AgCenter rice specialist.
The crop had its hurdles with a cool spring and a wet, muddy harvest. But Steve Linscombe, director of the LSU AgCenter Rice Research Station said the summer nights were not excessively hot, and that probably resulted in good yields and outstanding grain quality.
Linscombe said the 2013 crop year had perfect weather throughout the growing season, but the 2014 crop was challenged by weather at the start with a cool, wet spring, and a wet, muddy harvest. "In spite of that, our 2014 is going to be a good crop," he said.
Disease was not bad this year, even with heavy rainfall. The Rice Research Station recorded 33.6 inches of rain between May and August, compared to 13.2 inches for the same time period last year.
Linscombe said a large amount of south Louisiana acreage will be grown for a second crop, even though much of it was cut after the recommended Aug. 15 cutoff. "Some of the ratoon looks extremely good," he said.
Linscombe said more medium-grain rice was planted this year, in the range of 60,000-65,000 acres, because of the 150,000-acre reduction in California where drought resulted in a water shortage.
Linscombe said the usual decline in yields toward the late part of the harvest in south Louisiana was not as striking as usual. "The rice we were cutting in late August and early September was still yielding well. In the first week of September, we still had farmers cutting more than 60 barrels with good quality," he said.
Keith Collins, LSU AgCenter county agent in Richland Parish, said he first thought this year's crop in north Louisiana would be average. But as the harvest progressed, he has changed his mind.
"I think we're going to have an above-average crop," he said, adding that yields could be as good as last year's record crop.
He said many varieties are yielding just under 200 bushels with few reports of low quality milling.
But, he said, getting the crop out of the fields has been difficult with muddy conditions.
Keith Fontenot, LSU AgCenter county agent in Evangeline Parish, said the crop in his area has been good.
"We have had some producers who exceeded last year's crop," he said.
Fontenot said farmers are facing a stagnant market with low prices and not much rice being bought. "There's no movement of rice right now," he said.
Andrew Granger, LSU AgCenter county agent in Vermilion Parish, said the crop there resulted in above-average yields, but not quite as good as last year. But, he said, the wet harvest conditions have reduced the second crop for many farmers.
Rice prices are becoming an issue, making it difficult for some farmers to get financing for next year's crop, he said.
Tuesday 7 October 2014
Plan to improve all aspects of rice industry in Thailand
The Commerce Ministry will announce a "rice strategy" by the end of this month, aiming to improve the production, marketing and quality of Thai rice, while somehow improving farmers' lives without intervening in the "market mechanism".
Boonyarit Kalayanamit, director-general of the ministry's Internal Trade Department, said the plan was to ensure sustainable development for the entire rice industry from upstream to downstream.
"The rice strategy will emphasise how to increase farmers' incomes while focusing on innovation so that Thailand will be a centre for rice trading in Asean," he said.
The strategy will be outlined to government agencies, the private sector and farmers. It is expected to be ready this month to be proposed to Commerce Minister Chatchai Sarikulya and the Rice Policy and Management Committee.
The strategy is meant to solve long-term rice problems from the production stage to marketing. The government will set up rice-plantation zones while also encouraging farmers to grow other economic crops on land that is not suitable for rice.
The ministry will also support marketing and trading strategies, while avoiding intervention in the market mechanism.
Other strategies include creating fairness in rice trading, enhancing rice standards and the trading system, encouraging more rice consumption, increasing production efficiency, encouraging innovation in the rice industry, and developing the logistics system for rice.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said traders were very worried that the market price for rice will be low during the upcoming harvest season.
Thai rice production in the 2014-15 harvest season is expected to be 24 million tonnes of paddy. India will produce about 103 million tonnes of paddy. As demand for rice consumption in India will be 90 million tonnes, that country will still be a major export rival for Thailand next year.
Vietnam is projected to have output next year of 28 million to 29 million tonnes of rice, of which about 7 million to 8 million tonnes will be exported. Vietnam has also become a major rival for hom mali rice exports to many markets, including parts of Africa. This year, Vietnam could ship 1.2 million tonnes of fragrant rice to Africa, up from 900,000 tonnes last year.
Chookiat said Thailand's large stockpiles would put upward pressure on the competitiveness and downward stress on the rice price in the world market next year. However, this also depends on demand in many markets, including China, the Philippines and Indonesia.
Boonyarit Kalayanamit, director-general of the ministry's Internal Trade Department, said the plan was to ensure sustainable development for the entire rice industry from upstream to downstream.
"The rice strategy will emphasise how to increase farmers' incomes while focusing on innovation so that Thailand will be a centre for rice trading in Asean," he said.
The strategy will be outlined to government agencies, the private sector and farmers. It is expected to be ready this month to be proposed to Commerce Minister Chatchai Sarikulya and the Rice Policy and Management Committee.
The strategy is meant to solve long-term rice problems from the production stage to marketing. The government will set up rice-plantation zones while also encouraging farmers to grow other economic crops on land that is not suitable for rice.
The ministry will also support marketing and trading strategies, while avoiding intervention in the market mechanism.
Other strategies include creating fairness in rice trading, enhancing rice standards and the trading system, encouraging more rice consumption, increasing production efficiency, encouraging innovation in the rice industry, and developing the logistics system for rice.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said traders were very worried that the market price for rice will be low during the upcoming harvest season.
Thai rice production in the 2014-15 harvest season is expected to be 24 million tonnes of paddy. India will produce about 103 million tonnes of paddy. As demand for rice consumption in India will be 90 million tonnes, that country will still be a major export rival for Thailand next year.
Vietnam is projected to have output next year of 28 million to 29 million tonnes of rice, of which about 7 million to 8 million tonnes will be exported. Vietnam has also become a major rival for hom mali rice exports to many markets, including parts of Africa. This year, Vietnam could ship 1.2 million tonnes of fragrant rice to Africa, up from 900,000 tonnes last year.
Chookiat said Thailand's large stockpiles would put upward pressure on the competitiveness and downward stress on the rice price in the world market next year. However, this also depends on demand in many markets, including China, the Philippines and Indonesia.
El Nino Threatens Export Plans as Burma’s Rice Industry Revs Up
Hopes that Burma’s rice exports would reach 2 million tons this year look unlikely to be achieved due to the disruptive weather phenomenon known as El Nino, experts say.
Monsoonal rains needed to boost Burma’s late rice crop are expected to be lighter than usual due to the El Nino effect, leading to drier conditions.
Observers of the El Nino weather pattern, which occurs every few years due to warmer air currents generated in the Pacific Ocean, suggest it might be less severe than on previous occasions but could still disrupt various forms of agriculture across Southeast Asia. It could last until June 2015 and some meteorologists have suggested that December might be the worst month affected.
This year’s major wet season rice crops across Southeast Asia might escape the worst of El Nino, the US Department of Agriculture (USDA)’s Foreign Service said, “[but] dry season rice and corn crops, as well as palm oil, will become more vulnerable if El Nino develops and persists from October 2014 to April 2015.”
Burma exported 1.27 million tons of rice in 2013 and the Burma Rice Federation had said the figure for this year might reach the 2 million tons mark, boosted by higher demand from China and dislocation in the rice industry of rival exporter Thailand. However, even without any El Nino effect, the 2 million tons target is over-optimistic according to estimates made by the USDA.
The US agency predicted that rice production in Burma in 2014-2015 would most likely increase by 1 percent to 12.16 million tons, due to growing area expansion and improved water supply, and that rice exports would also be only marginally higher than last year—up about 1 percent to 1.31 million tons.
Burma’s government was “making an effort to provide farmers support in infrastructure development, mechanization [and] technology assistance,” the USDA said. But despite support programs, rice farmers in Burma could still not compete with other farmers in the region, including in Thailand and Vietnam, who received government support to compensate for lower prices, the agency said, citing trade sources.
Burma is forecast to be the fifth-largest rice producer in the Association of Southeast Asian Nations (ASEAN) region in the 2014-15 financial year —behind Indonesia, Vietnam, Thailand and the Philippines. But of these four, only Vietnam and Thailand are exporters.
“On the surface, rice markets remain calm and stable, but underlying market sentiments are rapidly changing because of weather disruptions in many rice-growing nations,” market watcher and rice scientist Sam Mohanty of the International Rice Research Institute said in a recent assessment.
“The global rice market faces the possibility of a production shortfall in the major rice-growing regions in South and Southeast Asia and also in China because of El Nino events. So far, the market has been quite nonchalant about this possibility because of large buffer stocks in key rice-growing countries.”
India, China and Thailand are well stocked with rice to see them through any possible disruptions in supplies, Mohanty said.
Burma’s rice federation sees China as offering the best market for expanding Burmese exports in coming years. About half of Burma’s rice exports went to China in 2013, despite the fact that the exports are technically illegal as there is not yet a health standards agreement on rice in place between the two countries.
Monsoonal rains needed to boost Burma’s late rice crop are expected to be lighter than usual due to the El Nino effect, leading to drier conditions.
Observers of the El Nino weather pattern, which occurs every few years due to warmer air currents generated in the Pacific Ocean, suggest it might be less severe than on previous occasions but could still disrupt various forms of agriculture across Southeast Asia. It could last until June 2015 and some meteorologists have suggested that December might be the worst month affected.
This year’s major wet season rice crops across Southeast Asia might escape the worst of El Nino, the US Department of Agriculture (USDA)’s Foreign Service said, “[but] dry season rice and corn crops, as well as palm oil, will become more vulnerable if El Nino develops and persists from October 2014 to April 2015.”
Burma exported 1.27 million tons of rice in 2013 and the Burma Rice Federation had said the figure for this year might reach the 2 million tons mark, boosted by higher demand from China and dislocation in the rice industry of rival exporter Thailand. However, even without any El Nino effect, the 2 million tons target is over-optimistic according to estimates made by the USDA.
The US agency predicted that rice production in Burma in 2014-2015 would most likely increase by 1 percent to 12.16 million tons, due to growing area expansion and improved water supply, and that rice exports would also be only marginally higher than last year—up about 1 percent to 1.31 million tons.
Burma’s government was “making an effort to provide farmers support in infrastructure development, mechanization [and] technology assistance,” the USDA said. But despite support programs, rice farmers in Burma could still not compete with other farmers in the region, including in Thailand and Vietnam, who received government support to compensate for lower prices, the agency said, citing trade sources.
Burma is forecast to be the fifth-largest rice producer in the Association of Southeast Asian Nations (ASEAN) region in the 2014-15 financial year —behind Indonesia, Vietnam, Thailand and the Philippines. But of these four, only Vietnam and Thailand are exporters.
“On the surface, rice markets remain calm and stable, but underlying market sentiments are rapidly changing because of weather disruptions in many rice-growing nations,” market watcher and rice scientist Sam Mohanty of the International Rice Research Institute said in a recent assessment.
“The global rice market faces the possibility of a production shortfall in the major rice-growing regions in South and Southeast Asia and also in China because of El Nino events. So far, the market has been quite nonchalant about this possibility because of large buffer stocks in key rice-growing countries.”
India, China and Thailand are well stocked with rice to see them through any possible disruptions in supplies, Mohanty said.
Burma’s rice federation sees China as offering the best market for expanding Burmese exports in coming years. About half of Burma’s rice exports went to China in 2013, despite the fact that the exports are technically illegal as there is not yet a health standards agreement on rice in place between the two countries.
Monday 6 October 2014
Thai govt sells over 50,000 tonnes of rice to private firms
The Thai government has approved the sale of more than 50,000 tonnes of rice from its stockpiles to private firms, a Commerce Ministry official said on Friday, as the authorities try to bring down huge stocks built up under a failed intervention scheme.
The rice was sold below the market price because it was old, Duangporn Rodphaya, head of the foreign trade department at the ministry, told Reuters, declining to give details. "The rice that is for sale is old, about two years old, so it has to be below the market price. But it's not way below the market. Private companies have additional costs to improve the quality. It's the same price we use for our tenders," she said.
The sales account for a fraction of the 18 million tonnes that Thailand had built up by this year under the intervention scheme, which effectively priced the grain out of world markets. An audit by the military government found that a fifth of that was either rotten or had gone missing.
Another official from the ministry, who declined to be named, said 59,600 tonnes of rice had been sold in the latest sale to four private companies for 570 million baht (S$22 million).
That would give an average price per tonne of around $295. It was unclear what grade of rice was sold. Benchmark five per cent broken rice is currently offered on the market at around US$425 (S$541) free on board.
The government of Prime Minister Yingluck Shinawatra, which was ousted by the army in May, accumulated the stockpiles under a programme that paid farmers well above market rates for their produce.
The current government wants to offload the stocks to recover some of the cash spent, but the authorities want to carry out the sales gradually so as to avoid pushing prices much lower, Duangporn told reporters earlier this week.
The military-backed government has held two rice auctions and sold around 70,000 tonnes of rice in each.
Duangporn told the reporters a third would be held soon and that discussions for deals with the Chinese and Iranian governments were also in the works.
The rice was sold below the market price because it was old, Duangporn Rodphaya, head of the foreign trade department at the ministry, told Reuters, declining to give details. "The rice that is for sale is old, about two years old, so it has to be below the market price. But it's not way below the market. Private companies have additional costs to improve the quality. It's the same price we use for our tenders," she said.
The sales account for a fraction of the 18 million tonnes that Thailand had built up by this year under the intervention scheme, which effectively priced the grain out of world markets. An audit by the military government found that a fifth of that was either rotten or had gone missing.
Another official from the ministry, who declined to be named, said 59,600 tonnes of rice had been sold in the latest sale to four private companies for 570 million baht (S$22 million).
That would give an average price per tonne of around $295. It was unclear what grade of rice was sold. Benchmark five per cent broken rice is currently offered on the market at around US$425 (S$541) free on board.
The government of Prime Minister Yingluck Shinawatra, which was ousted by the army in May, accumulated the stockpiles under a programme that paid farmers well above market rates for their produce.
The current government wants to offload the stocks to recover some of the cash spent, but the authorities want to carry out the sales gradually so as to avoid pushing prices much lower, Duangporn told reporters earlier this week.
The military-backed government has held two rice auctions and sold around 70,000 tonnes of rice in each.
Duangporn told the reporters a third would be held soon and that discussions for deals with the Chinese and Iranian governments were also in the works.
ASEAN integration seen to boost markets for Philippines organic rice produce
Prospects appear bright for the country’s organically-grown products with the integration by next year of the 10 member-states of the Association of Southeast Asian Nations (ASEAN).
Leo Cañeda, coordinator of the Department of Agriculture (DA)-led National Organic Agriculture Board, said producers of organic farm products could tap key cities or areas within ASEAN as primary target for market expansion when the region’s economic integration eventually rolls out.
He said products like organic high-value vegetables and rice produced in Region 12 or the Soccsksargen Region could take the lead in the export expansion.
The region comprises the provinces of South Cotabato, Sultan Kudarat, Sarangani, North Cotabato and the cities of General Santos, Koronadal, Tacurong, Kidapawan and Cotabato.
“There’s so much opportunities and advantages for our organic farmers in the ASEAN economic integration,” he said at the opening of the four-day 1st Soccsksargen Region Organic Agriculture Congress and Trade Fair here on Wednesday.
But Cañeda said organic farmers or producers should be prepared and equipped with the proper skills and knowledge so they can properly market their products in the ASEAN.
He specifically cited the proper quality standards and other related requirements for organic export products.
ASEAN created a special task force last year to lead the development and promotion of the region’s standards on organic agriculture.
The task force is specifically working on the crafting of a common standard agreeable to and recognized by the ASEAN member-states to facilitate the trading of organic products in the region.
Region 12 has around 50 hectares of palay areas that are mainly producing organic premium rice varieties for exports.
Last year, the area’s organic rice producers have started exporting black rice and other colored, long grained and aromatic rice varieties to the Middle East and Singapore.
DA Region 12 is currently working for the entry of locally-produced premium rice to major markets in Russia, Italy, United States and other parts of the Middle East.
Leo Cañeda, coordinator of the Department of Agriculture (DA)-led National Organic Agriculture Board, said producers of organic farm products could tap key cities or areas within ASEAN as primary target for market expansion when the region’s economic integration eventually rolls out.
He said products like organic high-value vegetables and rice produced in Region 12 or the Soccsksargen Region could take the lead in the export expansion.
The region comprises the provinces of South Cotabato, Sultan Kudarat, Sarangani, North Cotabato and the cities of General Santos, Koronadal, Tacurong, Kidapawan and Cotabato.
“There’s so much opportunities and advantages for our organic farmers in the ASEAN economic integration,” he said at the opening of the four-day 1st Soccsksargen Region Organic Agriculture Congress and Trade Fair here on Wednesday.
But Cañeda said organic farmers or producers should be prepared and equipped with the proper skills and knowledge so they can properly market their products in the ASEAN.
He specifically cited the proper quality standards and other related requirements for organic export products.
ASEAN created a special task force last year to lead the development and promotion of the region’s standards on organic agriculture.
The task force is specifically working on the crafting of a common standard agreeable to and recognized by the ASEAN member-states to facilitate the trading of organic products in the region.
Region 12 has around 50 hectares of palay areas that are mainly producing organic premium rice varieties for exports.
Last year, the area’s organic rice producers have started exporting black rice and other colored, long grained and aromatic rice varieties to the Middle East and Singapore.
DA Region 12 is currently working for the entry of locally-produced premium rice to major markets in Russia, Italy, United States and other parts of the Middle East.
Thailand Rice export volumes soar nearly 60% in first eight months
Rice exports in the first eight months of the year grew significantly, by almost 60 per cent year on year, to 6.59 million tonnes, thanks to strong demand in many markets and a high supply from government stocks, according to the Thai Rice Exporters Association.
The association reported that the value of rice exports also increased by 22.4 per cent year on year to Bt105.83 billion.
Chareon Charoen Laothamatas, president of the association, said demand had increased considerably since July this year, particularly for white rice in some African countries.
In the first eight months of last year, Thailand exported only 4.14 million tonnes of rice worth Bt86.47 billion.
In the JanuaryAugust period this year, Benin imported the most at 852,502 tonnes, followed by Nigeria with 474,561 tonnes, China with 432,220, Ivory Coast with 383,663 and South Africa with 335,529.
The association reported that the value of rice exports also increased by 22.4 per cent year on year to Bt105.83 billion.
Chareon Charoen Laothamatas, president of the association, said demand had increased considerably since July this year, particularly for white rice in some African countries.
In the first eight months of last year, Thailand exported only 4.14 million tonnes of rice worth Bt86.47 billion.
In the JanuaryAugust period this year, Benin imported the most at 852,502 tonnes, followed by Nigeria with 474,561 tonnes, China with 432,220, Ivory Coast with 383,663 and South Africa with 335,529.
Brazil grain and feed update
2013/2014 rice production is estimated at 8.3 mmt, a 3 percent increase from the
previous year. 2014/2015 production is forecast up 2 percent to 8.5 mmt on increased area. In the state
of Mato Grosso the increased area is attributed to the need to cultivate rice first when converting
degraded pastureland for other crops.
Rice Trade: 2013/2014 imports are estimated at 700,000 mt and exports at 900,000 mt, in line with
yearly trends. In August, Brazil shipped 31,500 mt of paddy rice to Turkey, despite onerous taxes and
transport costs. The rice industry sees this as success in expanding their global market share. The top
two destinations for Brazilian rice in 2014 are Venezuela and Cuba with 141,523 and 78,424 mt
respectively thus far. These two countries have constituted one third of rice exports between January
and August 2014.
Rice Consumption: Consumption remains steady with a slight upward trend due to population growth.
Average per person consumption is 41-43 kg per year and has held steady in recent years. Population
growth is expected to slightly outpace decreases in per capita consumption.
previous year. 2014/2015 production is forecast up 2 percent to 8.5 mmt on increased area. In the state
of Mato Grosso the increased area is attributed to the need to cultivate rice first when converting
degraded pastureland for other crops.
Rice Trade: 2013/2014 imports are estimated at 700,000 mt and exports at 900,000 mt, in line with
yearly trends. In August, Brazil shipped 31,500 mt of paddy rice to Turkey, despite onerous taxes and
transport costs. The rice industry sees this as success in expanding their global market share. The top
two destinations for Brazilian rice in 2014 are Venezuela and Cuba with 141,523 and 78,424 mt
respectively thus far. These two countries have constituted one third of rice exports between January
and August 2014.
Rice Consumption: Consumption remains steady with a slight upward trend due to population growth.
Average per person consumption is 41-43 kg per year and has held steady in recent years. Population
growth is expected to slightly outpace decreases in per capita consumption.
Paddy harvesting starts in Punjab, Haryana; late rains improve sentiment
Newly harvested paddy has started arriving in the markets of Punjab and Haryana while late rains have helped boost the area under the crop to more than last year's levels, developments that bode well for the supplies of the staple grain and food inflation.
Scanty rains in the first half of the June-September monsoon season had threatened to hurt this year's farm output, which is critical to the overall economy in a country where more than half the workforce is employed in agriculture. But rains had picked up in the second half, and though still this season's average rainfall is 12% below what is considered normal, water levels in reservoirs are better than their 10-year average. Late rains are likely to help keep soil moisture longer, benefiting winter crops such as wheat.
According to agriculture ministry data, total crop plantings at 101.93 million hectares for the week ended September 26 were still 2% below last year's level. Rice plantings at 37.48 million hectares were more than last season's 37.42 million hectares, but areas under coarse cereals, oilseeds, pulses and sugarcane were less.
Early-sown basmati and other rice varieties have started reaching mandis in the two northern grain-bowl states, ahead of the procurement season that begins on October 1. Farmers have also started harvesting other summer crops of cotton, soyabean and pulses.
Regional basmati exporters have already entered the market and are buying the 1509 basmati variety at Rs 2,450 a tonnes, said Raj Sood, a trader from the Khanna mandi in Punjab.
According to officials at Food Corporation of India, the government's grain procurement agency, it estimates to procure 30.05 million tonnes of rice this year. Of this, it is expected to buy 8.2 million tonnes from Punjab, 4.35 million tonnes from Chhattisgarh and 4.1 million tonnes from Uttar Pradesh. As of September 1, the country had adequate stock of 21.7 million tonnes of rice in its buffer and strategic reserve.
Exporters are, however, concerned that with the discontinuation of a 3% interest subvention scheme, they will not be able to export the same quantity as they shipped last time. Gurnam Arora, joint managing director of Kohinoor Foods, said global prices were weak and an incentive was necessary for the industry.
Data from the India Meteorological Department showed that two-thirds of the country's 36 sub-divisions received normal to excess rainfall this monsoon season. The country's major 85 reservoirs were filled to 79% of their total capacity of 155.05 billion cubic metres, down from 85% last year, but better than the 10-year average of 76%.
Himachal Pradesh, Gujarat, Punjab, Rajasthan, West Bengal, Tripura, Uttarakhand, Madhya Pradesh, Andhra Pradesh, Kerala and Tamil Nadu have less water in the their reservoirs than last year, the Central Water Commission said. The rainfall deficit has been worst in Haryana and west Uttar Pradesh at 56%, followed by Punjab at 50%.
Scanty rains in the first half of the June-September monsoon season had threatened to hurt this year's farm output, which is critical to the overall economy in a country where more than half the workforce is employed in agriculture. But rains had picked up in the second half, and though still this season's average rainfall is 12% below what is considered normal, water levels in reservoirs are better than their 10-year average. Late rains are likely to help keep soil moisture longer, benefiting winter crops such as wheat.
According to agriculture ministry data, total crop plantings at 101.93 million hectares for the week ended September 26 were still 2% below last year's level. Rice plantings at 37.48 million hectares were more than last season's 37.42 million hectares, but areas under coarse cereals, oilseeds, pulses and sugarcane were less.
Early-sown basmati and other rice varieties have started reaching mandis in the two northern grain-bowl states, ahead of the procurement season that begins on October 1. Farmers have also started harvesting other summer crops of cotton, soyabean and pulses.
Regional basmati exporters have already entered the market and are buying the 1509 basmati variety at Rs 2,450 a tonnes, said Raj Sood, a trader from the Khanna mandi in Punjab.
According to officials at Food Corporation of India, the government's grain procurement agency, it estimates to procure 30.05 million tonnes of rice this year. Of this, it is expected to buy 8.2 million tonnes from Punjab, 4.35 million tonnes from Chhattisgarh and 4.1 million tonnes from Uttar Pradesh. As of September 1, the country had adequate stock of 21.7 million tonnes of rice in its buffer and strategic reserve.
Exporters are, however, concerned that with the discontinuation of a 3% interest subvention scheme, they will not be able to export the same quantity as they shipped last time. Gurnam Arora, joint managing director of Kohinoor Foods, said global prices were weak and an incentive was necessary for the industry.
Data from the India Meteorological Department showed that two-thirds of the country's 36 sub-divisions received normal to excess rainfall this monsoon season. The country's major 85 reservoirs were filled to 79% of their total capacity of 155.05 billion cubic metres, down from 85% last year, but better than the 10-year average of 76%.
Himachal Pradesh, Gujarat, Punjab, Rajasthan, West Bengal, Tripura, Uttarakhand, Madhya Pradesh, Andhra Pradesh, Kerala and Tamil Nadu have less water in the their reservoirs than last year, the Central Water Commission said. The rainfall deficit has been worst in Haryana and west Uttar Pradesh at 56%, followed by Punjab at 50%.
Thursday 2 October 2014
Heavy rain hits Mekong Delta Vietnam rice harvest
Prolonged rains over the past week in the Cuu Long (Mekong) Delta have severely affected the harvest and quality of the summer-autumn rice crop.
The delta is entering peak harvest time for the crop, but harvesting has been slow, as ripe rice plants have been toppled by heavy rains and wind.
Pham Thi Ngot, who cultivates 0.6ha rice in Tam Binh District in Vinh Long Province, said more than 70 per cent of her plants had collapsed and must be harvested by hand.
Ngot said she was also short of workers as demand for farm help was high this season.
Heavy winds and rain have toppled about half of 27,000ha of ripe rice in Vinh Long Province, according to the province's Department of Agriculture and Rural Development.
Le Quang Thao, deputy chairman of the Xuan Hiep Commune People's Committee in Vinh Long's Tra On District, said: "The quality of harvested rice has declined, as many of the seeds have germinated."
Delta farmers have also had trouble sundrying their rice because of the rainy weather. In addition, there are not enough dryers on hand.
In Can Tho City, although farmers have harvested more than half of the city's 40,000ha of rice, few traders have bought the grain, citing low quality.
Rice companies have urged farmers to reduce the size of fields and plant only high-quality varieties.
The remaining cultivation areas should be switched to other cash crops, they said.
In Kieng Giang Province, the country's rice-production leader, heavy rains have also hindered harvesting.
Kien Giang's pump stations have been operating at full capacity over the past several days to draw water out of rice fields.
In addition, the price of hiring a worker to harvest one hectare of rice has gone up to VND500,000 (US$24).
Kien Giang has planted 230,000ha of rice for this summer-autumn crop.
In Hau Giang Province, farmers have harvested more than 25,000ha of 76,600ha of the summer-autumn crop, according to the province's Department of Agriculture and Rural Development.
Because of rains, farmers have been unable to dry rice and, as a result, the grain has germinated, leading to lower selling prices, according to the province's Department of Agriculture and Rural Development.
The delta is entering peak harvest time for the crop, but harvesting has been slow, as ripe rice plants have been toppled by heavy rains and wind.
Pham Thi Ngot, who cultivates 0.6ha rice in Tam Binh District in Vinh Long Province, said more than 70 per cent of her plants had collapsed and must be harvested by hand.
Ngot said she was also short of workers as demand for farm help was high this season.
Heavy winds and rain have toppled about half of 27,000ha of ripe rice in Vinh Long Province, according to the province's Department of Agriculture and Rural Development.
Le Quang Thao, deputy chairman of the Xuan Hiep Commune People's Committee in Vinh Long's Tra On District, said: "The quality of harvested rice has declined, as many of the seeds have germinated."
Delta farmers have also had trouble sundrying their rice because of the rainy weather. In addition, there are not enough dryers on hand.
In Can Tho City, although farmers have harvested more than half of the city's 40,000ha of rice, few traders have bought the grain, citing low quality.
Rice companies have urged farmers to reduce the size of fields and plant only high-quality varieties.
The remaining cultivation areas should be switched to other cash crops, they said.
In Kieng Giang Province, the country's rice-production leader, heavy rains have also hindered harvesting.
Kien Giang's pump stations have been operating at full capacity over the past several days to draw water out of rice fields.
In addition, the price of hiring a worker to harvest one hectare of rice has gone up to VND500,000 (US$24).
Kien Giang has planted 230,000ha of rice for this summer-autumn crop.
In Hau Giang Province, farmers have harvested more than 25,000ha of 76,600ha of the summer-autumn crop, according to the province's Department of Agriculture and Rural Development.
Because of rains, farmers have been unable to dry rice and, as a result, the grain has germinated, leading to lower selling prices, according to the province's Department of Agriculture and Rural Development.
Bangladesh rice output hits a record high
Rice production edged up to a new high last fiscal year due to an increase in yield in all three crops seasons for favourable weather and a more balanced use of fertiliser.
Production rose to 3.44 crore tonnes in fiscal 2013-14, from 3.38 crore tonnes a year ago, thanks to a record boro output.
Boro yield rose 1.6 percent year-on-year to 1.90 crore tonnes in fiscal 2013-14, according to a recent estimate by Bangladesh Bureau of Statistics.
Despite the rise in output, imports started to show an upward trend in fiscal 2014-15 that began in July. Some 4,840 tonnes of rice were imported during July to September 28, according to data from the food ministry. During July to September 18 last year, 990 tonnes of rice were imported.
"Maybe some importers are bringing in rice from neighbouring countries to reap price benefits," said Abul Bashar Chowdhury, chairman of Chittagong-based BSM Group.
This was another year of increased rice yield despite falling cultivable land to grow the staple.
The country stands well above its annual food grain consumption requirement of less than three crore tonnes, according to a study by Bangladesh Institute of Development Studies.
The research organisation estimated that the daily per capita food grain consumption was 509 grams, including rice at 462 grams.
As a result, retail prices of rice have remained stable in the past couple of months. One of the main reasons behind this is a high level of global production of rice and wheat.
Food grain prices have been the lowest in recent years worldwide, Chowdhury said.
Banking on higher production and increased public stocks, the government has decided to export 50,000 tonnes of rice to Sri Lanka under a special arrangement.
The government decision comes at a time when damage to aman seedlings due to recurrent floods is feared to affect production.
The Department of Agricultural Extension (DAE) said most farmers were able to replant the seedlings of the second biggest crop on their affected fields after the floods.
But recent floods in some districts have affected crops, mostly aman paddy, on 1.13 lakh hectares of land, said a senior official of the DAE, seeking anonymity.
The DAE targeted to bring 52.50 lakh hectares of crop land under aman cultivation. So far, 55.05 lakh hectares have come under transplantation, the official said.
"Farmers replanted more than 90 percent of the seedlings in the fields damaged by the floods. But the recurrence of the floods is more depressing," he said.
The DAE aims to ensure production of 1.34 crore tonnes of rice from aman cultivation. It also targets 24 lakh tonnes of the staple during the aus season by ensuring cultivation on 10.55 lakh hectares.
The US Department of Agriculture lowered its prediction on Bangladesh's rice harvest last month. It says Bangladesh may harvest 3.46 crore tonnes of rice in the current fiscal year, down from its previous projection of 3.48 crore tonnes.
Production rose to 3.44 crore tonnes in fiscal 2013-14, from 3.38 crore tonnes a year ago, thanks to a record boro output.
Boro yield rose 1.6 percent year-on-year to 1.90 crore tonnes in fiscal 2013-14, according to a recent estimate by Bangladesh Bureau of Statistics.
Despite the rise in output, imports started to show an upward trend in fiscal 2014-15 that began in July. Some 4,840 tonnes of rice were imported during July to September 28, according to data from the food ministry. During July to September 18 last year, 990 tonnes of rice were imported.
"Maybe some importers are bringing in rice from neighbouring countries to reap price benefits," said Abul Bashar Chowdhury, chairman of Chittagong-based BSM Group.
This was another year of increased rice yield despite falling cultivable land to grow the staple.
The country stands well above its annual food grain consumption requirement of less than three crore tonnes, according to a study by Bangladesh Institute of Development Studies.
The research organisation estimated that the daily per capita food grain consumption was 509 grams, including rice at 462 grams.
As a result, retail prices of rice have remained stable in the past couple of months. One of the main reasons behind this is a high level of global production of rice and wheat.
Food grain prices have been the lowest in recent years worldwide, Chowdhury said.
Banking on higher production and increased public stocks, the government has decided to export 50,000 tonnes of rice to Sri Lanka under a special arrangement.
The government decision comes at a time when damage to aman seedlings due to recurrent floods is feared to affect production.
The Department of Agricultural Extension (DAE) said most farmers were able to replant the seedlings of the second biggest crop on their affected fields after the floods.
But recent floods in some districts have affected crops, mostly aman paddy, on 1.13 lakh hectares of land, said a senior official of the DAE, seeking anonymity.
The DAE targeted to bring 52.50 lakh hectares of crop land under aman cultivation. So far, 55.05 lakh hectares have come under transplantation, the official said.
"Farmers replanted more than 90 percent of the seedlings in the fields damaged by the floods. But the recurrence of the floods is more depressing," he said.
The DAE aims to ensure production of 1.34 crore tonnes of rice from aman cultivation. It also targets 24 lakh tonnes of the staple during the aus season by ensuring cultivation on 10.55 lakh hectares.
The US Department of Agriculture lowered its prediction on Bangladesh's rice harvest last month. It says Bangladesh may harvest 3.46 crore tonnes of rice in the current fiscal year, down from its previous projection of 3.48 crore tonnes.
Wednesday 1 October 2014
Heavy rain hits Mekong Delta rice harvest
Prolonged rains over the past week in the Cuu Long (Mekong) Delta have severely affected the harvest and quality of the summer-autumn rice crop.
The delta is entering peak harvest time for the crop, but harvesting has been slow, as ripe rice plants have been toppled by heavy rains and wind.
Pham Thi Ngot, who cultivates 0.6ha rice in Tam Binh District in Vinh Long Province, said more than 70 per cent of her plants had collapsed and must be harvested by hand.
Ngot said she was also short of workers as demand for farm help was high this season.
Heavy winds and rain have toppled about half of 27,000ha of ripe rice in Vinh Long Province, according to the province's Department of Agriculture and Rural Development.
Le Quang Thao, deputy chairman of the Xuan Hiep Commune People's Committee in Vinh Long's Tra On District, said: "The quality of harvested rice has declined, as many of the seeds have germinated."
Delta farmers have also had trouble sundrying their rice because of the rainy weather. In addition, there are not enough dryers on hand.
In Can Tho City, although farmers have harvested more than half of the city's 40,000ha of rice, few traders have bought the grain, citing low quality.
Rice companies have urged farmers to reduce the size of fields and plant only high-quality varieties.
The remaining cultivation areas should be switched to other cash crops, they said.
In Kieng Giang Province, the country's rice-production leader, heavy rains have also hindered harvesting.
Kien Giang's pump stations have been operating at full capacity over the past several days to draw water out of rice fields.
In addition, the price of hiring a worker to harvest one hectare of rice has gone up to VND500,000 (US$24).
Kien Giang has planted 230,000ha of rice for this summer-autumn crop.
In Hau Giang Province, farmers have harvested more than 25,000ha of 76,600ha of the summer-autumn crop, according to the province's Department of Agriculture and Rural Development.
Because of rains, farmers have been unable to dry rice and, as a result, the grain has germinated, leading to lower selling prices, according to the province's Department of Agriculture and Rural Development.
The delta is entering peak harvest time for the crop, but harvesting has been slow, as ripe rice plants have been toppled by heavy rains and wind.
Pham Thi Ngot, who cultivates 0.6ha rice in Tam Binh District in Vinh Long Province, said more than 70 per cent of her plants had collapsed and must be harvested by hand.
Ngot said she was also short of workers as demand for farm help was high this season.
Heavy winds and rain have toppled about half of 27,000ha of ripe rice in Vinh Long Province, according to the province's Department of Agriculture and Rural Development.
Le Quang Thao, deputy chairman of the Xuan Hiep Commune People's Committee in Vinh Long's Tra On District, said: "The quality of harvested rice has declined, as many of the seeds have germinated."
Delta farmers have also had trouble sundrying their rice because of the rainy weather. In addition, there are not enough dryers on hand.
In Can Tho City, although farmers have harvested more than half of the city's 40,000ha of rice, few traders have bought the grain, citing low quality.
Rice companies have urged farmers to reduce the size of fields and plant only high-quality varieties.
The remaining cultivation areas should be switched to other cash crops, they said.
In Kieng Giang Province, the country's rice-production leader, heavy rains have also hindered harvesting.
Kien Giang's pump stations have been operating at full capacity over the past several days to draw water out of rice fields.
In addition, the price of hiring a worker to harvest one hectare of rice has gone up to VND500,000 (US$24).
Kien Giang has planted 230,000ha of rice for this summer-autumn crop.
In Hau Giang Province, farmers have harvested more than 25,000ha of 76,600ha of the summer-autumn crop, according to the province's Department of Agriculture and Rural Development.
Because of rains, farmers have been unable to dry rice and, as a result, the grain has germinated, leading to lower selling prices, according to the province's Department of Agriculture and Rural Development.
Thai government sells 70,000 T of rice from stocks in 2nd tender: official
The Thai government has sold another 70,000 tonnes of rice from the 140,000 tonnes it planned to sell in its second tender in September, a senior commerce ministry official said on Monday.
After the army took power in May and inspected rice stocks nationwide, state warehouses were estimated to hold around 18 million tonnes of rice, about a fifth of which was unlikely to be sold as it was believed to be missing and rotten.
The government said it aimed to sell around 100,000 tonnes of rice from stocks monthly, to gradually cut burdensome storage costs without depressing global prices.
"The 70,000 tonnes were awarded to 11 exporters who bid at prices close to market rates," said Duangporn Rodphaya, head of the commerce ministry's department of foreign trade, which oversees the government's sales of rice stocks.
The common grade Thai 5 percent broken white rice was offered at $440 per tonne.
In the first tender in August, the government sold 73,000 tonnes of rice out of 167,000 tonnes on offer, due to low bids.
Senior officials said the government is due to evaluate the quantity and quality of rice stocks next month to devise ways to deal with the grain and make up losses incurred by the previous government's money-guzzling rice buying scheme.
The rice support scheme helped bring former prime minister Yingluck Shinawatra to power in a landslide election in 2011 due to support from farmers, mostly in the remote areas of the country's northeast.
However, the scheme backfired when the government failed to sell rice to pay arrears to angry farmers, leading to months of protests that ended in a military coup in May.
After the army took power in May and inspected rice stocks nationwide, state warehouses were estimated to hold around 18 million tonnes of rice, about a fifth of which was unlikely to be sold as it was believed to be missing and rotten.
The government said it aimed to sell around 100,000 tonnes of rice from stocks monthly, to gradually cut burdensome storage costs without depressing global prices.
"The 70,000 tonnes were awarded to 11 exporters who bid at prices close to market rates," said Duangporn Rodphaya, head of the commerce ministry's department of foreign trade, which oversees the government's sales of rice stocks.
The common grade Thai 5 percent broken white rice was offered at $440 per tonne.
In the first tender in August, the government sold 73,000 tonnes of rice out of 167,000 tonnes on offer, due to low bids.
Senior officials said the government is due to evaluate the quantity and quality of rice stocks next month to devise ways to deal with the grain and make up losses incurred by the previous government's money-guzzling rice buying scheme.
The rice support scheme helped bring former prime minister Yingluck Shinawatra to power in a landslide election in 2011 due to support from farmers, mostly in the remote areas of the country's northeast.
However, the scheme backfired when the government failed to sell rice to pay arrears to angry farmers, leading to months of protests that ended in a military coup in May.
India Rice production in 2014 pegged at 88 million tonnes
As the four-month southwest monsoon season comes to an end on Tuesday, sowing of major kharif crops has picked up pace with the total area crossing 100 million hectares in 2014, a tad lower than last year's 104 million hectares.
Area under rice, the main foodgrain grown during the kharif season, was estimated at 37.48 million hectares, more than 37.42 million hectares in 2013, when India received normal rains. According to officials in the know, the incremental rise in paddy area is because of basmati planting.
Rice production is estimated to be 88.02 million tonnes in 2014, four per cent less than last year's figure, the agriculture ministry's latest data showed.
This showed the yield declined moderately during the period. The total kharif acreage this season was pegged at 101.92 million hectares, which is lower than the 104.46 million hectares acreage during the same time last year. Good retreating monsoon in some parts of north and central India boosted planting, officials said.
According to the government's first advance estimate, India's foodgrain production in 2014-15 kharif season is expected to fall by nine million tonnes to 120.27 million tonnes , compared to the same period last year, on account of uneven southwest monsoon in the first part of the 2014 season.
As on September 29, monsoon was about 12 per cent below normal, a big improvement from the 40 per cent deficit seen in July.
The biggest impact of erratic rains is expected to be on coarse cereals, pulses and groundnut.
The estimates show that coarse cereal production in the kharif season is expected to be around 27.05 million tonnes, against 31.25 million tonnes in 2013-14 - a fall of 13.4 per cent.
Production of pulses in the kharif season is expected to be 5.2 million tonnes against 6.02 million tonnes last year, while that of oilseeds is expected to be 19.66 million tonnes, down from last year's 22.40 million tonnes.
Meanwhile, the agriculture ministry data also showed that the area under cotton has also risen to 12.65 million hectares from 11.43 million hectares during the year ago period.
However, acreage of other major kharif crops as on September 26 is still lower than last year's level.
The area under coarse cereals currently stands at 18.23 million hectares, pulses at 10.10 million hectares, oilseeds at 17.75 million hectares, sugarcane at 4.87 million hectares and jute and mesta at 8.15 million hectares.
The area under these crops is still lower than the year-ago period because sowing operations got delayed due to late arrival of southwest monsoon. With kharif crops covered in less area, the overall production is expected to be affected.
Aiming to make up for the shortfall in some summer crops, the Centre had asked state governments to focus on 3.37 million hectares, which were left unsown due to delayed monsoon, during the rabi season.
The government has set a rabi production target of 94 million tonnes for wheat this year.
Area under rice, the main foodgrain grown during the kharif season, was estimated at 37.48 million hectares, more than 37.42 million hectares in 2013, when India received normal rains. According to officials in the know, the incremental rise in paddy area is because of basmati planting.
Rice production is estimated to be 88.02 million tonnes in 2014, four per cent less than last year's figure, the agriculture ministry's latest data showed.
This showed the yield declined moderately during the period. The total kharif acreage this season was pegged at 101.92 million hectares, which is lower than the 104.46 million hectares acreage during the same time last year. Good retreating monsoon in some parts of north and central India boosted planting, officials said.
According to the government's first advance estimate, India's foodgrain production in 2014-15 kharif season is expected to fall by nine million tonnes to 120.27 million tonnes , compared to the same period last year, on account of uneven southwest monsoon in the first part of the 2014 season.
As on September 29, monsoon was about 12 per cent below normal, a big improvement from the 40 per cent deficit seen in July.
The biggest impact of erratic rains is expected to be on coarse cereals, pulses and groundnut.
The estimates show that coarse cereal production in the kharif season is expected to be around 27.05 million tonnes, against 31.25 million tonnes in 2013-14 - a fall of 13.4 per cent.
Production of pulses in the kharif season is expected to be 5.2 million tonnes against 6.02 million tonnes last year, while that of oilseeds is expected to be 19.66 million tonnes, down from last year's 22.40 million tonnes.
Meanwhile, the agriculture ministry data also showed that the area under cotton has also risen to 12.65 million hectares from 11.43 million hectares during the year ago period.
However, acreage of other major kharif crops as on September 26 is still lower than last year's level.
The area under coarse cereals currently stands at 18.23 million hectares, pulses at 10.10 million hectares, oilseeds at 17.75 million hectares, sugarcane at 4.87 million hectares and jute and mesta at 8.15 million hectares.
The area under these crops is still lower than the year-ago period because sowing operations got delayed due to late arrival of southwest monsoon. With kharif crops covered in less area, the overall production is expected to be affected.
Aiming to make up for the shortfall in some summer crops, the Centre had asked state governments to focus on 3.37 million hectares, which were left unsown due to delayed monsoon, during the rabi season.
The government has set a rabi production target of 94 million tonnes for wheat this year.
Thailand Commerce Ministry pushes for expansion of organic rice cultivation
The Commerce Ministry is planning to increase the market shares of Thai organic rice in both domestic and world markets, to resolve the problems of falling rice prices and tap the rising popularity for health products among consumers.
Director-General of the Department of Internal Trade (DIT) Jintana Chaiyawannakarn has gone down to inspect an organic rice production farm owned by the Farm Suk Company in Saraburi central province.
According to Ms. Jintana, the farm provides a model for other organic rice growers to boost quality of their produce. She also said that the demand for organic rice is continuously on the rise, as a number of consumers have become increasingly cautious about their health.
Meanwhile, Mr. Kan Traithong, the owner of Farm Suk, revealed that the capital cost for an organic rice farm is only around 3,000 baht per rai since the crop does not require pesticides or chemicals.
Organic rice currently fetches a price of up to 10,000 baht per ton in the market. The high demand, both in local and international markets, has made organic rice an attractive source of investment.
Director-General of the Department of Internal Trade (DIT) Jintana Chaiyawannakarn has gone down to inspect an organic rice production farm owned by the Farm Suk Company in Saraburi central province.
According to Ms. Jintana, the farm provides a model for other organic rice growers to boost quality of their produce. She also said that the demand for organic rice is continuously on the rise, as a number of consumers have become increasingly cautious about their health.
Meanwhile, Mr. Kan Traithong, the owner of Farm Suk, revealed that the capital cost for an organic rice farm is only around 3,000 baht per rai since the crop does not require pesticides or chemicals.
Organic rice currently fetches a price of up to 10,000 baht per ton in the market. The high demand, both in local and international markets, has made organic rice an attractive source of investment.
Thursday 5 June 2014
More rice exports expected for Thailand as pledging scheme ends
The Thai Rice Exporters Association on Wednesday raised the forecast for rice exports as the end of the state pledging scheme would help bring down prices.
The association said it expects the country to export 9 million tonnes of rice in 2014. This is 20 per cent more than the previously-estimated 7.5 million tonnes.
Rice exports fell in Thailand after the deposed government in October 2011 began buying rice from farmers at above market price, making export rates uncompetitive.
India overtook Thailand as the world’s top rice exporter in 2012 as the scheme, which was meant to help poor farmers, caused a hike in export prices.
The price of Thai 5-per cent broken rice reached US$650 per tonne in October 2011 while India was selling the grain overseas at far lower rates.
The Thai grain is now selling at between US$380 and US$385, while Vietnamese rice costs US$400-US$405.
Some 800,000 farmers were owed payment for months after the rice pledging scheme ran into financial trouble.
The scheme ended in February this year.
Thailand’s current military junta began paying money owed to the farmers after it seized power in a coup.
The association said it expects the country to export 9 million tonnes of rice in 2014. This is 20 per cent more than the previously-estimated 7.5 million tonnes.
Rice exports fell in Thailand after the deposed government in October 2011 began buying rice from farmers at above market price, making export rates uncompetitive.
India overtook Thailand as the world’s top rice exporter in 2012 as the scheme, which was meant to help poor farmers, caused a hike in export prices.
The price of Thai 5-per cent broken rice reached US$650 per tonne in October 2011 while India was selling the grain overseas at far lower rates.
The Thai grain is now selling at between US$380 and US$385, while Vietnamese rice costs US$400-US$405.
Some 800,000 farmers were owed payment for months after the rice pledging scheme ran into financial trouble.
The scheme ended in February this year.
Thailand’s current military junta began paying money owed to the farmers after it seized power in a coup.
Thai farmers urge military govt to launch new rice support scheme
Rice farmers in Thailand are asking the military government to come up with a new market intervention scheme to stem the decline in prices of the grain.
The previous price-support scheme floated by former Prime Minister Yingluck Shinawatra ended in February after causing billions of dollars in losses to the government and leading to an estimated 90 billion baht (S$3.5 billion) in unpaid dues to farmers.
The Thai military, which seized power in May after months of political turmoil, is moving to pay the arrears. A senior finance ministry official said on Tuesday the ministry has secured a loan for 50 billion baht to pay farmers.
But farmers said more needed to be done for them. "We still need the government's price supporting scheme. It may not be the same as Yingluck's scheme, but it could be a new measure to help farmers when prices are falling," Prasit Boonchoey, head of the Thai Rice Farmers Association, told Reuters.
The previous price-support scheme floated by former Prime Minister Yingluck Shinawatra ended in February after causing billions of dollars in losses to the government and leading to an estimated 90 billion baht (S$3.5 billion) in unpaid dues to farmers.
The Thai military, which seized power in May after months of political turmoil, is moving to pay the arrears. A senior finance ministry official said on Tuesday the ministry has secured a loan for 50 billion baht to pay farmers.
But farmers said more needed to be done for them. "We still need the government's price supporting scheme. It may not be the same as Yingluck's scheme, but it could be a new measure to help farmers when prices are falling," Prasit Boonchoey, head of the Thai Rice Farmers Association, told Reuters.
Thailand Big demand at scheme’s loan auction
The 50-billion-baht loan facility of the Bank for Agriculture and Agricultural Cooperatives (BAAC) for paying rice farmers drew strong demand from local banks yesterday, with almost three times oversubscription and rates set lower than those of government bonds.
Chularat: Low rates are unprecedented
The state-backed farm bank's three-year term loans carry a slightly lower rate than the Bangkok Interbank Offered Rate of 2.2792%, marking the first state-enterprise bonds with a lower rate than comparable government bonds, said Chularat Suteethorn, director-general of the Public Debt Management Office.
The loans charge interest at 27 basis points lower than three-year government bonds.
Total demand at yesterday's term-loan auction was 145 billion baht. Twelve financial institutions took part, with the state's Government Savings Bank emerging as the winner.
The healthy demand reflected financial institutions' confidence in a return to normal after the military coup on May 22, in contrast with the problems faced by the former Yingluck Shinawatra government.
The rice-pledging scheme was at the heart of the previous government's agenda, but it also drew ire over hefty losses and corruption.
Finance permanent secretary Rungson Sriworasat recently said losses incurred from the pledging scheme over the previous five crops could be lower than 500 billion baht.
The Yingluck government was months behind schedule in repaying 92 billion baht to about 850,000 rice farmers, as its hands were tied by a caretaker status that gave it limited authority to borrow fresh funds.
The newly installed military junta has made pledging payments a priority as a pump-priming measure to alleviate farmers' financial burden and create a multiplier effect to boost the country's economic growth.
The BAAC, which bears responsibility for payments to farmers under the rice-pledging scheme, has paid out 40 billion baht to farmers in a week.
The Fiscal Policy Office has said payouts to rice farmers could boost the country's GDP by 0.2 percentage points this year.
Ms Chularat said the BAAC would draw down 30 billion baht of the 50-billion-baht loan facility on Friday and the remaining 20 billion on June 13.
Chularat: Low rates are unprecedented
The state-backed farm bank's three-year term loans carry a slightly lower rate than the Bangkok Interbank Offered Rate of 2.2792%, marking the first state-enterprise bonds with a lower rate than comparable government bonds, said Chularat Suteethorn, director-general of the Public Debt Management Office.
The loans charge interest at 27 basis points lower than three-year government bonds.
Total demand at yesterday's term-loan auction was 145 billion baht. Twelve financial institutions took part, with the state's Government Savings Bank emerging as the winner.
The healthy demand reflected financial institutions' confidence in a return to normal after the military coup on May 22, in contrast with the problems faced by the former Yingluck Shinawatra government.
The rice-pledging scheme was at the heart of the previous government's agenda, but it also drew ire over hefty losses and corruption.
Finance permanent secretary Rungson Sriworasat recently said losses incurred from the pledging scheme over the previous five crops could be lower than 500 billion baht.
The Yingluck government was months behind schedule in repaying 92 billion baht to about 850,000 rice farmers, as its hands were tied by a caretaker status that gave it limited authority to borrow fresh funds.
The newly installed military junta has made pledging payments a priority as a pump-priming measure to alleviate farmers' financial burden and create a multiplier effect to boost the country's economic growth.
The BAAC, which bears responsibility for payments to farmers under the rice-pledging scheme, has paid out 40 billion baht to farmers in a week.
The Fiscal Policy Office has said payouts to rice farmers could boost the country's GDP by 0.2 percentage points this year.
Ms Chularat said the BAAC would draw down 30 billion baht of the 50-billion-baht loan facility on Friday and the remaining 20 billion on June 13.
Monday 2 June 2014
Farmers call for new Thailand rice price pledge
Farming industry leaders have called on the National Council for Peace and Order (NCPO) to issue a policy guaranteeing rice sales at 10,000 baht per tonne for the next crop, amid fears the price of the grain is falling.
Growers made the demand after the NCPO began to pay long-overdue funds to farmers owed cash under the former government's rice pledging scheme, which guaranteed a rice price of 15,000 baht per tonne in 2011.
Songpon Poonsawat, chairman of the Council of Farmers in Ang Thong province, said his organisation would propose short-term assistance packages for the NCPO to consider, to help farmers suffering as a result of low rice prices.
“We would be happy if the NCPO could guarantee our rice price at 10,000 baht per tonne for the next crop. Each farmer has invested at least 5,000 baht per rai,” Mr Songpon said.
"If not, we may suffer big losses from selling the rice, because the current market price is about 5,000-6,000 baht per tonne."
Mr Songpon suggested the intervention be carried out for the next two crops, until the market price of rice returns to normal. He argued the situation would improve if rice stockpiles were sold off.
According to Ministry of Finance inspectors, the rice-pledging project is projected to have cost the country 500 billion baht, while millions of tonnes of rice have disappeared from stocks.
Mr Songpon said the former government tried to sell a huge amount of rice stock, which forced the market price of the grain to drop.
In the long-term, he said the new government should draft a policy educating farmers on how to reduce the cost of rice production, while officials should also encourage so-called rice zoning, which promotes the planting of rice in certain areas to improve the quality of the product.
He said farmers are currently planting low-grade rice, because they want to produce enough yield to join the rice pledging scheme, but this is harming Thailand's reputation for producing premium-grade rice.
Ubonsak Bualuang-ngam, chairman of the Committee on Central Agriculture, said the next government should support co-operatives for farmers, to strengthen the farming industry.
Mr Ubonsak said the co-operative system empowers farmers to set their own prices and encourages them to plant more premium rice.
Reducing or eliminating the use of chemicals in rice production would help reduce the cost of production, he said, adding that organic rice zones must be developed to promote and support chemical-free rice and benefit people's health.
Growers made the demand after the NCPO began to pay long-overdue funds to farmers owed cash under the former government's rice pledging scheme, which guaranteed a rice price of 15,000 baht per tonne in 2011.
Songpon Poonsawat, chairman of the Council of Farmers in Ang Thong province, said his organisation would propose short-term assistance packages for the NCPO to consider, to help farmers suffering as a result of low rice prices.
“We would be happy if the NCPO could guarantee our rice price at 10,000 baht per tonne for the next crop. Each farmer has invested at least 5,000 baht per rai,” Mr Songpon said.
"If not, we may suffer big losses from selling the rice, because the current market price is about 5,000-6,000 baht per tonne."
Mr Songpon suggested the intervention be carried out for the next two crops, until the market price of rice returns to normal. He argued the situation would improve if rice stockpiles were sold off.
According to Ministry of Finance inspectors, the rice-pledging project is projected to have cost the country 500 billion baht, while millions of tonnes of rice have disappeared from stocks.
Mr Songpon said the former government tried to sell a huge amount of rice stock, which forced the market price of the grain to drop.
In the long-term, he said the new government should draft a policy educating farmers on how to reduce the cost of rice production, while officials should also encourage so-called rice zoning, which promotes the planting of rice in certain areas to improve the quality of the product.
He said farmers are currently planting low-grade rice, because they want to produce enough yield to join the rice pledging scheme, but this is harming Thailand's reputation for producing premium-grade rice.
Ubonsak Bualuang-ngam, chairman of the Committee on Central Agriculture, said the next government should support co-operatives for farmers, to strengthen the farming industry.
Mr Ubonsak said the co-operative system empowers farmers to set their own prices and encourages them to plant more premium rice.
Reducing or eliminating the use of chemicals in rice production would help reduce the cost of production, he said, adding that organic rice zones must be developed to promote and support chemical-free rice and benefit people's health.
Thursday 29 May 2014
Rice exports to Thailand dive
Rice exports to Thailand plummeted in the first four months of the year as a result of that country’s surplus, which reached record levels at the end of 2013.
Between January and April, Cambodia exported just 1,550 tonnes of rice to Thailand, down 89 per cent from the 14,250 tonnes shipped in the same period last year, according to the Ministry of Agriculture’s monthly reports.
Hun Lak, president of rice export firm Mekong Oryza Trade, said the decline was due to Thailand’s rice stockpiles, which were accumulated under a state purchasing program launched in 2011 and scrapped at the end of last year.
Thailand accumulated rice stockpiles of reportedly more than 12.8 million tonnes at the end of 2013, equal to about a third of the global export market.
“The overstock of rice in Thailand reduced the demand from Thai traders for Cambodian rice,” Lak said.
“Also, rice prices in Thailand are declining as a result, meaning buyers simply cannot make a profit by importing Cambodian rice,” he added.
Thai rice prices sunk from $1,100 per tonne to $950 per tonne in February as the state-run rice pledging scheme came to an end and the Thai government began selling off its stockpiles. Consequently, Cambodian exporters reduced their prices from $950 to $880 per tonne to compete.
Lim Bunheng, president of Loran Company, said Cambodian farmers depend on Thailand and Vietnam for exports largely due to a lack of local facilities to polish and clean rice – the final stage before the product is fit for international standards.
“I hope the situation will get better after June – when more of Thailand’s stockpiled rice is sold off – because it is having an impact on our industry now both in terms export volume and price,” he said.
Sok Puthyvuth, president of the Cambodia Rice Federation, called on rice exporters to seek other markets rather than “sitting and waiting” for the situation to get better.
“We should take this chance to start to diversify markets to potential countries like China, Indonesia as well as countries in the EU for our rice while waiting for Thailand to settle things,” he said.
Thailand imported 23,550 tonnes of Cambodian rice in 2013, making it the Kingdom’s sixth largest destination for rice exports.
Between January and April, Cambodia exported just 1,550 tonnes of rice to Thailand, down 89 per cent from the 14,250 tonnes shipped in the same period last year, according to the Ministry of Agriculture’s monthly reports.
Hun Lak, president of rice export firm Mekong Oryza Trade, said the decline was due to Thailand’s rice stockpiles, which were accumulated under a state purchasing program launched in 2011 and scrapped at the end of last year.
Thailand accumulated rice stockpiles of reportedly more than 12.8 million tonnes at the end of 2013, equal to about a third of the global export market.
“The overstock of rice in Thailand reduced the demand from Thai traders for Cambodian rice,” Lak said.
“Also, rice prices in Thailand are declining as a result, meaning buyers simply cannot make a profit by importing Cambodian rice,” he added.
Thai rice prices sunk from $1,100 per tonne to $950 per tonne in February as the state-run rice pledging scheme came to an end and the Thai government began selling off its stockpiles. Consequently, Cambodian exporters reduced their prices from $950 to $880 per tonne to compete.
Lim Bunheng, president of Loran Company, said Cambodian farmers depend on Thailand and Vietnam for exports largely due to a lack of local facilities to polish and clean rice – the final stage before the product is fit for international standards.
“I hope the situation will get better after June – when more of Thailand’s stockpiled rice is sold off – because it is having an impact on our industry now both in terms export volume and price,” he said.
Sok Puthyvuth, president of the Cambodia Rice Federation, called on rice exporters to seek other markets rather than “sitting and waiting” for the situation to get better.
“We should take this chance to start to diversify markets to potential countries like China, Indonesia as well as countries in the EU for our rice while waiting for Thailand to settle things,” he said.
Thailand imported 23,550 tonnes of Cambodian rice in 2013, making it the Kingdom’s sixth largest destination for rice exports.
Northern India to Endure Scorching Heat and Drought Due to Weak Monsoon
The yearly advance of the southwest monsoon is vital to both people and agriculture across India and rest of the Indian subcontinent.
The normal onset of the southwest monsoon occurs during the second half of May across Myanmar before reaching southern India at the beginning of June.
This year the monsoon was actually several days ahead of schedule reaching Myanmar, but it has stalled over the Bay of Bengal during the past week.
As a result, the onset of the monsoon in southern India will likely be up to a week late across parts of the south, but the beneficial rains are forecast to increase during the second week of June.
The heaviest rains are expected to be focused from the western Ghats to the west coast during this time. Scattered rains are expected across the southeast.
With an El Nino expected to build during the second half of the year, rainfall across central and northern India could be impacted greatly.
As a result, the northward advance of the southwest monsoon is forecast to be delayed for most of central and northern India allowing temperatures to soar well above normal for much of the month of June.
Several long stretches of temperatures over 42 C (108 F) are possible in New Delhi and the surrounding region.
Long-range forecasts are for below-normal monsoon rainfall in these areas, stretching into neighboring Pakistan. Concerns continue to rise that a drought will develop across northwest India and Pakistan as a result of prolonged dry and hot weather followed by a weak monsoon.
India is a large supplier of rice and cotton globally, and these crops could suffer greatly as a result of the impending hot and dry conditions. According to Accuweather.com Commodity Weather Expert Jason Nicholls, "Both crop yields and quality are likely to be impacted by drought later this summer in northwest India and Pakistan."
Farther south, the monsoon should arrive before the full impact of the oncoming El Nino occurs. The best chance for a near-normal monsoon will be in the southwest.
With rainfall expected to be below normal for much of India during this monsoon season, any rainfall from tropical cyclones would be increasingly important.
The Bay of Bengal will likely produce several tropical cyclones during the summer months as a near-normal season is anticipated. Although flooding is always a threat from landfalling tropical cyclones, this will be offset by the positives of rainfall during a stretch of otherwise below-normal rainfall.
The normal onset of the southwest monsoon occurs during the second half of May across Myanmar before reaching southern India at the beginning of June.
This year the monsoon was actually several days ahead of schedule reaching Myanmar, but it has stalled over the Bay of Bengal during the past week.
As a result, the onset of the monsoon in southern India will likely be up to a week late across parts of the south, but the beneficial rains are forecast to increase during the second week of June.
The heaviest rains are expected to be focused from the western Ghats to the west coast during this time. Scattered rains are expected across the southeast.
With an El Nino expected to build during the second half of the year, rainfall across central and northern India could be impacted greatly.
As a result, the northward advance of the southwest monsoon is forecast to be delayed for most of central and northern India allowing temperatures to soar well above normal for much of the month of June.
Several long stretches of temperatures over 42 C (108 F) are possible in New Delhi and the surrounding region.
Long-range forecasts are for below-normal monsoon rainfall in these areas, stretching into neighboring Pakistan. Concerns continue to rise that a drought will develop across northwest India and Pakistan as a result of prolonged dry and hot weather followed by a weak monsoon.
India is a large supplier of rice and cotton globally, and these crops could suffer greatly as a result of the impending hot and dry conditions. According to Accuweather.com Commodity Weather Expert Jason Nicholls, "Both crop yields and quality are likely to be impacted by drought later this summer in northwest India and Pakistan."
Farther south, the monsoon should arrive before the full impact of the oncoming El Nino occurs. The best chance for a near-normal monsoon will be in the southwest.
With rainfall expected to be below normal for much of India during this monsoon season, any rainfall from tropical cyclones would be increasingly important.
The Bay of Bengal will likely produce several tropical cyclones during the summer months as a near-normal season is anticipated. Although flooding is always a threat from landfalling tropical cyclones, this will be offset by the positives of rainfall during a stretch of otherwise below-normal rainfall.
Wednesday 28 May 2014
Jordan requests import of 20,000 tons of rice as exception to Egypt ban
Jordan’s Ministry of Industry and Trade submitted a formal request to the Egyptian Ministry of Industry and Foreign Trade last week to allow the import of 20,000 tons of Egyptian rice to Jordan as an exception to the ban on rice exports, said Issa Haider Murad, chairman of the Amman Chamber of Commerce.
“We have asked Egypt also to provide various agricultural products, supply commodities and fruits in order to compensate for the shortfall that Jordan witnessed in these categories following the deterioration of commercial traffic with Syria, as well as Jordan accommodates a large number of Syrian refugees, Palestinians and Egyptian workers,” he said.
Jordan imports a type of medium grain rice similar to Egypt’s products from a number of places including the United States, Spain and Italy, although the Egyptian variety is cheaper. Jordan imports other types of rice from Thailand and Pakistan, and the nation’s rice imports reach up to 80,000-100,000 tons per year.
Egypt consumes approximately 2.5m tons of white rice per year while it produces approximately 3.5m tons, translating into a surplus of up to 1m tons per year. Several years ago, the government began scaling back cultivation to cut water consumption, imposing a ban on exports in 2008.
Jordan was one of the first countries to declare its support for the roadmap announced by former defense minister and army chief Abdel Fattah Al-Sisi on 3 July last year, following the ouster of Islamist president Mohamed Morsi.
“We have asked Egypt also to provide various agricultural products, supply commodities and fruits in order to compensate for the shortfall that Jordan witnessed in these categories following the deterioration of commercial traffic with Syria, as well as Jordan accommodates a large number of Syrian refugees, Palestinians and Egyptian workers,” he said.
Jordan imports a type of medium grain rice similar to Egypt’s products from a number of places including the United States, Spain and Italy, although the Egyptian variety is cheaper. Jordan imports other types of rice from Thailand and Pakistan, and the nation’s rice imports reach up to 80,000-100,000 tons per year.
Egypt consumes approximately 2.5m tons of white rice per year while it produces approximately 3.5m tons, translating into a surplus of up to 1m tons per year. Several years ago, the government began scaling back cultivation to cut water consumption, imposing a ban on exports in 2008.
Jordan was one of the first countries to declare its support for the roadmap announced by former defense minister and army chief Abdel Fattah Al-Sisi on 3 July last year, following the ouster of Islamist president Mohamed Morsi.
Tuesday 27 May 2014
Rice in Thailand Climbing on Signs Army Won’t Allow Cheap Sales
Rice prices in Thailand are set to advance as much as 8 percent as the lowest rates in five years attract buyers and on speculation the military government won’t allow sales at cheap levels, exporters said.
The cost of the 5 percent broken variety may rise to $400 a metric ton from $370, Somkiat Makcayathorn, secretary general of the Thai Rice Exporters Association, said by phone yesterday. New-crop rates already increased $5 this week, said Mamadou Ciss, the president of Alliance Commodities (Suisse) SA.
The army last week removed the cabinet led by the Pheu Thai Party in a coup. The government started buying rice from farmers at above-market rates in 2011, boosting stockpiles to a level equivalent to about a third of annual global trade. Prices plunged 23 percent last year and the program lapsed in February. The junta-led National Council for Peace and Order will check the amount and quality of stockpiles before going ahead with sales, the commerce ministry said.
“We feel that we have to pay more than before,” said Ciss, who’s traded rice since 1984. “Thai rice is now the cheapest in the world” and demand has increased from China, Nigeria and Ivory Coast, he said by phone from Geneva.
Prices of 5 percent broken white rice from Thailand extended their decline by about 12 percent this year and Somkiat described the price of $370 as a market floor.
The rally will be limited by stockpiles in Thailand, Somkiat and Ciss said. State inventories stood at 16.7 million tons as of Feb. 11, the commerce ministry estimated. That compares with global trade of 41 million tons this year, U.S. Department of Agriculture data show.
Rising demand will boost Thai exports to 10 million tons this year, beating an earlier prediction of 7.5 million tons, Somkiat said. The country will regain its position as the world’s biggest shipper in 2015, the USDA estimates.
“The military government is signaling it won’t offload rice at cheap rates,” Chookiat Ophaswongse, the exporters’ association’s honorary president, said by phone. “This will prompt buyers to increase purchases as prices may continue to rise.”
The cost of the 5 percent broken variety may rise to $400 a metric ton from $370, Somkiat Makcayathorn, secretary general of the Thai Rice Exporters Association, said by phone yesterday. New-crop rates already increased $5 this week, said Mamadou Ciss, the president of Alliance Commodities (Suisse) SA.
The army last week removed the cabinet led by the Pheu Thai Party in a coup. The government started buying rice from farmers at above-market rates in 2011, boosting stockpiles to a level equivalent to about a third of annual global trade. Prices plunged 23 percent last year and the program lapsed in February. The junta-led National Council for Peace and Order will check the amount and quality of stockpiles before going ahead with sales, the commerce ministry said.
“We feel that we have to pay more than before,” said Ciss, who’s traded rice since 1984. “Thai rice is now the cheapest in the world” and demand has increased from China, Nigeria and Ivory Coast, he said by phone from Geneva.
Prices of 5 percent broken white rice from Thailand extended their decline by about 12 percent this year and Somkiat described the price of $370 as a market floor.
The rally will be limited by stockpiles in Thailand, Somkiat and Ciss said. State inventories stood at 16.7 million tons as of Feb. 11, the commerce ministry estimated. That compares with global trade of 41 million tons this year, U.S. Department of Agriculture data show.
Rising demand will boost Thai exports to 10 million tons this year, beating an earlier prediction of 7.5 million tons, Somkiat said. The country will regain its position as the world’s biggest shipper in 2015, the USDA estimates.
“The military government is signaling it won’t offload rice at cheap rates,” Chookiat Ophaswongse, the exporters’ association’s honorary president, said by phone. “This will prompt buyers to increase purchases as prices may continue to rise.”
Thailand Rice farmers overjoyed as payments begin
RICE FARMERS across the country were delighted as payments under the rice-pledging scheme resumed yesterday under the National Council for Peace and Order (NCPO).
I am so glad that the money has arrived," Chamnarn Taenghom from Phichit province said.
During the past six months, millions of farmers had desperately pressed for payments from the Yingluck Shinawatra-led administration to no avail. While the previous government blamed the months-long political turmoil as the main obstacle, critics blamed massive corruption. After the NCPO seized power, it vowed to prioritise the payments to farmers.
"We need money to invest in a new crop season," Chamnarn said.
According to the Phichit branch of the Bank for Agriculture and Agricultural Co-operatives (BAAC), it is paying more than 10,000 farmers under the Bt2-billion budget approved by the NCPO.
Additional funds are on the way. BAAC branches have been allocated different amounts, as the number of farmers at each branch differs.
Sa-ngob Bua-jan yesterday showed up at the BAAC's Khon Kaen branch and found that the payments had progressed to queue No 1023 already.
"I have two queue cards, one being No 1056 and the other being 1406. So I am convinced I will get my money soon," he said.
Sa-ngob, 66, thanked the NCPO for giving priority to rice farmers. Many farmers committed suicide recently due to the delayed payments.
Nupin Promta, a 47-year-old farmer, was overjoyed when she learnt that the BAAC had begun paying again. "I am told I will get money within five days," she said.
The BAAC branch in her hometown has already received a Bt650-million budget and will get more.
Elsewhere, payments to farmers under the rice-pledging scheme have also resumed.
In Uttaradit province, Boonrod Prabsamornchai received more than Bt236,000 from the rice-pledging scheme yesterday.
"It has revived my hope," he said.
Kittisak Rattanawaraha, who chairs the Network of Rice Farmers in the Lower North, said with the NCPO running the country all participants in the rice-pledging scheme believed they would be paid within one month.
"All farmers are delighted," he said.
In Sukhothai province, rice farmers joined more than 1,000 demonstrators in expressing support for the military. They handed flowers to a major-general at the Sukhothai City Hall.
I am so glad that the money has arrived," Chamnarn Taenghom from Phichit province said.
During the past six months, millions of farmers had desperately pressed for payments from the Yingluck Shinawatra-led administration to no avail. While the previous government blamed the months-long political turmoil as the main obstacle, critics blamed massive corruption. After the NCPO seized power, it vowed to prioritise the payments to farmers.
"We need money to invest in a new crop season," Chamnarn said.
According to the Phichit branch of the Bank for Agriculture and Agricultural Co-operatives (BAAC), it is paying more than 10,000 farmers under the Bt2-billion budget approved by the NCPO.
Additional funds are on the way. BAAC branches have been allocated different amounts, as the number of farmers at each branch differs.
Sa-ngob Bua-jan yesterday showed up at the BAAC's Khon Kaen branch and found that the payments had progressed to queue No 1023 already.
"I have two queue cards, one being No 1056 and the other being 1406. So I am convinced I will get my money soon," he said.
Sa-ngob, 66, thanked the NCPO for giving priority to rice farmers. Many farmers committed suicide recently due to the delayed payments.
Nupin Promta, a 47-year-old farmer, was overjoyed when she learnt that the BAAC had begun paying again. "I am told I will get money within five days," she said.
The BAAC branch in her hometown has already received a Bt650-million budget and will get more.
Elsewhere, payments to farmers under the rice-pledging scheme have also resumed.
In Uttaradit province, Boonrod Prabsamornchai received more than Bt236,000 from the rice-pledging scheme yesterday.
"It has revived my hope," he said.
Kittisak Rattanawaraha, who chairs the Network of Rice Farmers in the Lower North, said with the NCPO running the country all participants in the rice-pledging scheme believed they would be paid within one month.
"All farmers are delighted," he said.
In Sukhothai province, rice farmers joined more than 1,000 demonstrators in expressing support for the military. They handed flowers to a major-general at the Sukhothai City Hall.
Thai army rulers rush to placate rice farmers, boost economy
Thailand's new military rulers are moving fast to tackle economic problems caused by the absence of a proper government since December and are making it a priority to pay arrears owed to rice farmers, supporters of the government they ousted.
The military seized power on Thursday after nearly seven months of turmoil that hurt business confidence, halted much government spending and scared away tourists.
The economy shrank 2.1% in the first quarter and recession was on the cards.
Former Prime Minister Yingluck Shinawatra dissolved parliament in December and called an election for February.
From that moment, her caretaker government was unable to initiate new policies, even as the economy foundered, and found it impossible to raise funds for the troubled rice scheme.
The military has now torn up the constitution and the finance ministry has moved quickly to find money for the farmers, inviting banks to tender early next month to provide 50 billion baht (RM4.9 billion) in loans to fund the rice scheme.
"We have seen their intention to help farmers. This is an urgent issue," said Chaiyarit Anuchitworawong, a senior vice-president at Bangkok Bank Pcl, Thailand's top lender.
Gothom Arya, a lecturer in human rights studies at Mahidol University, did not think the urgency was necessarily political, designed to placate supporters of Yingluck, her Puea Thai Party and her brother, Thaksin Shinatra, another former premier deposed by the army in 2006 .
"There are hundreds of thousands of farmers in need of money and they are owed months of payment, which wasn't possible while both sides were squabbling," he said.
"The army isn't thinking right now about turning a pro-Thaksin electorate away from Puea Thai Party or any other pro-Thaksin party.
"My view is that they're thinking: let's solve one of the most pressing problems in the country first."
Whatever the motivation, 40 billion baht will be injected into the rural economy fairly quickly as the state-run Bank of Agriculture and Agricultural Cooperatives pays some of the 90 billion baht (RM8.8 billion) owed to farmers from its reserves.
The military government plans to pay the remaining 50 billion baht in less than a month, according to comments from coup leader General Prayuth Chan-ocha.
Air Chief Marshal Prajin Juntong, who is overseeing economic matters for the junta, told reporters after meeting top civil servants that the rice payments could add 0.2 percentage point to economic growth this year.
He said that would be on top of the forecast of 2% growth. That is the middle of the range forecast by the NESDB planning agency, which compiles Thailand's GDP figures.
Business leaders are expecting an economic stimulus package and are relieved that it should now also be possible to get a state budget ready for the new fiscal year from October 1.
Prajin, who is also chairman of flag carrier Thai Airways International, said the budget would be on time.
"This should be positive for the economy in the second half," said Surachai Kositsareewond, an executive vice-president at Bangchak Petroleum Pcl. "The clearer economic policies should help boost confidence and the private sector is ready to adjust."
The new government will roll over a cut in the corporate tax rate to 20%, which lapses in December, and an extension of the 7% value-added tax rate, before it reverts to 10% in September, Somchai Sajjapong, head of the Finance Ministry's fiscal policy office, told reporters.
The deposed government had planned to do this, but did not have the authority, leaving businesses up in the air.
The government will also extend cuts to income tax rates brought in at the end of 2013, Somchai said.
It will go ahead with some projects under a halted 2 trillion baht (RM195.8 billion) infrastructure plan, as well as parts of a 350 billion baht (RM34 billion) water management project drawn up after disastrous floods in 2011, but repeatedly delayed.
Somchai said he was confident the economy would grow more than 2% this year and that the ministry was hoping for 3%. To reassure financial markets, he said the military government had no intention of imposing capital controls.
The last military-led government in Thailand brought in draconian controls in December 2006, at a time when the baht was soaring. They caused the stock market to plunge 14.8% in a single day.
The military seized power on Thursday after nearly seven months of turmoil that hurt business confidence, halted much government spending and scared away tourists.
The economy shrank 2.1% in the first quarter and recession was on the cards.
Former Prime Minister Yingluck Shinawatra dissolved parliament in December and called an election for February.
From that moment, her caretaker government was unable to initiate new policies, even as the economy foundered, and found it impossible to raise funds for the troubled rice scheme.
The military has now torn up the constitution and the finance ministry has moved quickly to find money for the farmers, inviting banks to tender early next month to provide 50 billion baht (RM4.9 billion) in loans to fund the rice scheme.
"We have seen their intention to help farmers. This is an urgent issue," said Chaiyarit Anuchitworawong, a senior vice-president at Bangkok Bank Pcl, Thailand's top lender.
Gothom Arya, a lecturer in human rights studies at Mahidol University, did not think the urgency was necessarily political, designed to placate supporters of Yingluck, her Puea Thai Party and her brother, Thaksin Shinatra, another former premier deposed by the army in 2006 .
"There are hundreds of thousands of farmers in need of money and they are owed months of payment, which wasn't possible while both sides were squabbling," he said.
"The army isn't thinking right now about turning a pro-Thaksin electorate away from Puea Thai Party or any other pro-Thaksin party.
"My view is that they're thinking: let's solve one of the most pressing problems in the country first."
Whatever the motivation, 40 billion baht will be injected into the rural economy fairly quickly as the state-run Bank of Agriculture and Agricultural Cooperatives pays some of the 90 billion baht (RM8.8 billion) owed to farmers from its reserves.
The military government plans to pay the remaining 50 billion baht in less than a month, according to comments from coup leader General Prayuth Chan-ocha.
Air Chief Marshal Prajin Juntong, who is overseeing economic matters for the junta, told reporters after meeting top civil servants that the rice payments could add 0.2 percentage point to economic growth this year.
He said that would be on top of the forecast of 2% growth. That is the middle of the range forecast by the NESDB planning agency, which compiles Thailand's GDP figures.
Business leaders are expecting an economic stimulus package and are relieved that it should now also be possible to get a state budget ready for the new fiscal year from October 1.
Prajin, who is also chairman of flag carrier Thai Airways International, said the budget would be on time.
"This should be positive for the economy in the second half," said Surachai Kositsareewond, an executive vice-president at Bangchak Petroleum Pcl. "The clearer economic policies should help boost confidence and the private sector is ready to adjust."
The new government will roll over a cut in the corporate tax rate to 20%, which lapses in December, and an extension of the 7% value-added tax rate, before it reverts to 10% in September, Somchai Sajjapong, head of the Finance Ministry's fiscal policy office, told reporters.
The deposed government had planned to do this, but did not have the authority, leaving businesses up in the air.
The government will also extend cuts to income tax rates brought in at the end of 2013, Somchai said.
It will go ahead with some projects under a halted 2 trillion baht (RM195.8 billion) infrastructure plan, as well as parts of a 350 billion baht (RM34 billion) water management project drawn up after disastrous floods in 2011, but repeatedly delayed.
Somchai said he was confident the economy would grow more than 2% this year and that the ministry was hoping for 3%. To reassure financial markets, he said the military government had no intention of imposing capital controls.
The last military-led government in Thailand brought in draconian controls in December 2006, at a time when the baht was soaring. They caused the stock market to plunge 14.8% in a single day.
Saturday 8 March 2014
Fears over surplus rice sales in India, Thailand may be groundless
- Vietnam Investment Review - http://www.vir.com.vn/ -
16:19 | 07/03/2014
Fears over surplus rice sales in India, Thailand may be groundless
Agricultural expert chews over whether there is currently a price manipulation in the rice market.
Over the past two weeks local newspapers have reported that Thailand – a leading global rice exporter – is dumping their colossal stocks while Indonesia has also announced an even larger supply. This may cause the price of rice to tumble around the world and have a major impact on Vietnam’s exports.
At this point the Mekong Delta – Vietnam’s granary – has begun its major harvest season and the news from Thailand and India is likely to cast a pall over both the domestic and export markets.
Let’s go inside these assumptions.
First is the case of Thailand.
According to the US Department of Agriculture (USDA) and the Thai Rice Exporters Association (TREA) statistics, following the government’s subsidy policy the Thai government bought over 55 million tonnes of paddy rice (equivalent to nearly 36 million tonnes of rice, three quarters of it white rice) at higher than market prices from October 2011 to February 2014.
Meanwhile the country only exported 10.3 million tonnes of white rice at prices averages $540 per tonne, meaning that Thailand is still holding onto stocks of nearly 16.5 million tonnes of white rice and about 5 million tonnes of glutinous and high-grade rice varieties.
Given this situation, early this year Thai acting Minister of Commerce unveiled a plan to sell one million tonnes of rice each month in the first quarter of 2014.
A USDA report showed that from the beginning of this year through February 13 there were only three public rice auctions in Thailand at which nearly 860,000 tonnes of rice were offered for sale.
The bid price was from 12-30 per cent lower than market price, fluctuating in the range of $322-$405 per tonne and only 100,000 tonnes was reportedly earmarked for export.
But the winning bid price and volumes have yet to be announced.
Also according to the USDA, by February 23 Thailand had only exported 464,000 tonnes of white rice, down 31 per cent against the same period 2013.
Therefore, the concern that Thailand was dumping its huge rice stocks remains most likely an assumption.
In the case of India, saying that Vietnamese rice can’t compete in the global market due to the fact that India has huge reserves of 32 million tonnes was baseless. Why?
It is likely because according to USDA reports from the time India resumed rice exports in September 2011, the government has never held a rice auction. It has consistently held wheat flour auctions.
This practice may suggest the Indian government is using its rice stocks to support the price subsidy policy for local consumers via a public distribution system.
The USDA has reasons to forecast that the demand for rice in India would rise by three million tonnes, leading to a two million tonne reduction of exports.
This year is the first that the Indian government has executed its law on food security, a promise made by the ruling party four years ago.
This means about 70 per cent of the population in rural areas and 50 per cent in urban areas will benefit from the government’s price subsidy, leading to a huge amount of rice being mobilised to serve the programme.
In other words, the reasons why Thailand and India are retaining their rice stocks are different and therefore equating them and linking them to Vietnam’s rice exports is not a fair assumption.
Top experts and government authorities need to step in to investigate whether Thailand is dumping its rice stocks to ensure stability in the domestic market. This is the only way to truly protect Mekong farmers’ best interests.
By Nguyen Dinh Bich, an agricultural expert
16:19 | 07/03/2014
Fears over surplus rice sales in India, Thailand may be groundless
Agricultural expert chews over whether there is currently a price manipulation in the rice market.
Over the past two weeks local newspapers have reported that Thailand – a leading global rice exporter – is dumping their colossal stocks while Indonesia has also announced an even larger supply. This may cause the price of rice to tumble around the world and have a major impact on Vietnam’s exports.
At this point the Mekong Delta – Vietnam’s granary – has begun its major harvest season and the news from Thailand and India is likely to cast a pall over both the domestic and export markets.
Let’s go inside these assumptions.
First is the case of Thailand.
According to the US Department of Agriculture (USDA) and the Thai Rice Exporters Association (TREA) statistics, following the government’s subsidy policy the Thai government bought over 55 million tonnes of paddy rice (equivalent to nearly 36 million tonnes of rice, three quarters of it white rice) at higher than market prices from October 2011 to February 2014.
Meanwhile the country only exported 10.3 million tonnes of white rice at prices averages $540 per tonne, meaning that Thailand is still holding onto stocks of nearly 16.5 million tonnes of white rice and about 5 million tonnes of glutinous and high-grade rice varieties.
Given this situation, early this year Thai acting Minister of Commerce unveiled a plan to sell one million tonnes of rice each month in the first quarter of 2014.
A USDA report showed that from the beginning of this year through February 13 there were only three public rice auctions in Thailand at which nearly 860,000 tonnes of rice were offered for sale.
The bid price was from 12-30 per cent lower than market price, fluctuating in the range of $322-$405 per tonne and only 100,000 tonnes was reportedly earmarked for export.
But the winning bid price and volumes have yet to be announced.
Also according to the USDA, by February 23 Thailand had only exported 464,000 tonnes of white rice, down 31 per cent against the same period 2013.
Therefore, the concern that Thailand was dumping its huge rice stocks remains most likely an assumption.
In the case of India, saying that Vietnamese rice can’t compete in the global market due to the fact that India has huge reserves of 32 million tonnes was baseless. Why?
It is likely because according to USDA reports from the time India resumed rice exports in September 2011, the government has never held a rice auction. It has consistently held wheat flour auctions.
This practice may suggest the Indian government is using its rice stocks to support the price subsidy policy for local consumers via a public distribution system.
The USDA has reasons to forecast that the demand for rice in India would rise by three million tonnes, leading to a two million tonne reduction of exports.
This year is the first that the Indian government has executed its law on food security, a promise made by the ruling party four years ago.
This means about 70 per cent of the population in rural areas and 50 per cent in urban areas will benefit from the government’s price subsidy, leading to a huge amount of rice being mobilised to serve the programme.
In other words, the reasons why Thailand and India are retaining their rice stocks are different and therefore equating them and linking them to Vietnam’s rice exports is not a fair assumption.
Top experts and government authorities need to step in to investigate whether Thailand is dumping its rice stocks to ensure stability in the domestic market. This is the only way to truly protect Mekong farmers’ best interests.
By Nguyen Dinh Bich, an agricultural expert
Friday 7 March 2014
Global market awaits cheap Thai rice
Rice traders on the world market have temporarily paused dealing to wait for the Thai government to sell its stockpile cheap to repay a 20 billion baht loan to finance the rice-pledging scheme, according to an exporter of the grain.
The Election Commission (EC) has approved the caretaker government's plan to disburse 20 billion baht from the Central Fund to pay farmers long-overdue money for pledged rice crops.
However, the government must pay back all the money before May 31, 2014.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the price of 5% broken rice price from Thailand had dropped by US$20 a tonne, from $435-445 three weeks ago to $415-425 a tonne.
The price of Thai parboiled rice has also fallen by $15 a tonne in one week, from $460-470 to $445-455 a tonne.
He predicted that the price of Thai rice would drop further in the near future since Vietnam’s second-crop rice would be harvested from the middle of March onwards. Vietnam is expected to produce more than 10 million tonnes of unmilled rice this harvest.
At the same time, rice producing countries including India and Pakistan also hold significant stocks to be released onto the world market. As a result, tougher competition is expected and prices are likely to be pressured down, he said.
The price of 5% white rice from Vietnam is currently between $385-395 a tonne, while India selling its equivalent at $415-420 and Pakistan at $395-405.
“Rice buyers have stopped purchasing as they wait for cheaper prices, particularly after the Election Commission set the deadline for repayment of the 20 billion baht at the end of May. This means that Thailand has to sell more than two million tonnes in the market. When buyers realised this, they decided to wait to buy cheaper rice,” said Mr Chookiat.
The Thai Foreign Trade Department on Wednesday announced a government-to-government deal with China to sell one million tonnes of rice, with an agreement inked by the department and the state-owned China National Cereals, Oils and Foodstuffs Corporation in Beijing this week.
The Election Commission (EC) has approved the caretaker government's plan to disburse 20 billion baht from the Central Fund to pay farmers long-overdue money for pledged rice crops.
However, the government must pay back all the money before May 31, 2014.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the price of 5% broken rice price from Thailand had dropped by US$20 a tonne, from $435-445 three weeks ago to $415-425 a tonne.
The price of Thai parboiled rice has also fallen by $15 a tonne in one week, from $460-470 to $445-455 a tonne.
He predicted that the price of Thai rice would drop further in the near future since Vietnam’s second-crop rice would be harvested from the middle of March onwards. Vietnam is expected to produce more than 10 million tonnes of unmilled rice this harvest.
At the same time, rice producing countries including India and Pakistan also hold significant stocks to be released onto the world market. As a result, tougher competition is expected and prices are likely to be pressured down, he said.
The price of 5% white rice from Vietnam is currently between $385-395 a tonne, while India selling its equivalent at $415-420 and Pakistan at $395-405.
“Rice buyers have stopped purchasing as they wait for cheaper prices, particularly after the Election Commission set the deadline for repayment of the 20 billion baht at the end of May. This means that Thailand has to sell more than two million tonnes in the market. When buyers realised this, they decided to wait to buy cheaper rice,” said Mr Chookiat.
The Thai Foreign Trade Department on Wednesday announced a government-to-government deal with China to sell one million tonnes of rice, with an agreement inked by the department and the state-owned China National Cereals, Oils and Foodstuffs Corporation in Beijing this week.
Nigeria to reduce tariff on imported rice
The Minister of Finance, Dr Ngozi Okonjo-Iweala, on Wednesday said the Federal Government was contemplating a downward review of tariff on importation of rice.
Okonjo-Iweala, who disclosed this while answering questions at the ‘Budget 2014 Jam’, in Abuja said the drop in the tariff would reduce smuggling of the commodity into the country.
The News Agency of Nigeria reports that Budget 2014 Jam is a youth online programme where the minister answers questions on the Federal Government’s 2014 budget from youths across the nation.
The three-day programme, which began on Tuesday is organised by the Ministry of Finance in collaboration with IBM Technology, a telecommunication firm.
The minister said the existing 110 per cent duty on the importation of rice was encouraging smuggling of the commodity into the country.
“We increased the tariff to 110 per cent, and it encouraged some people to go and grow rice and we grew 1.1 million metric tonnes of the product.
“But it also encouraged smuggling from neighbouring countries because they immediately dropped their own tariffs to 10 per cent,” she said.
She added that the rice issue was similar to tariff on importation of used vehicles, saying “we are watching it now to see what the appropriate tariff to be paid on it will be.’’
The minister added, “For rice, we decided to bring it down because we see that it is not working.’’
Okonjo-Iweala explained that the government had decided to encourage the automobile industry to ensure that vehicles were manufactured in the country.
Okonjo-Iweala, who disclosed this while answering questions at the ‘Budget 2014 Jam’, in Abuja said the drop in the tariff would reduce smuggling of the commodity into the country.
The News Agency of Nigeria reports that Budget 2014 Jam is a youth online programme where the minister answers questions on the Federal Government’s 2014 budget from youths across the nation.
The three-day programme, which began on Tuesday is organised by the Ministry of Finance in collaboration with IBM Technology, a telecommunication firm.
The minister said the existing 110 per cent duty on the importation of rice was encouraging smuggling of the commodity into the country.
“We increased the tariff to 110 per cent, and it encouraged some people to go and grow rice and we grew 1.1 million metric tonnes of the product.
“But it also encouraged smuggling from neighbouring countries because they immediately dropped their own tariffs to 10 per cent,” she said.
She added that the rice issue was similar to tariff on importation of used vehicles, saying “we are watching it now to see what the appropriate tariff to be paid on it will be.’’
The minister added, “For rice, we decided to bring it down because we see that it is not working.’’
Okonjo-Iweala explained that the government had decided to encourage the automobile industry to ensure that vehicles were manufactured in the country.
Vietnam to stockpile 1m tonnes of rice
Vietnam, the world's second-largest rice exporter, will stockpile 1 million tonnes of rice in the winter-spring crop to help boost prices, authorities said Thursday.
The stockpile will run from March to mid-April, the Vietnam Food Association said, which will affect Vietnam's biggest rice-producing region, the Mekong Delta.
Around 10.3 million tonnes of unhusked rice is expected to be produced in the Mekong Delta during this period, the Ministry of Agriculture and Rural Development said.
Export volume fell sharply in the first two months of this year and is predicted to remain low in the coming months due to weak demand in the global market and strong competition from other rice exporters, including Thailand, India and Myanmar.
A number of rice exporters have asked the government to boost exports to countries including China, Indonesia and the Philippines.
Vietnam plans to export 7 million tonnes of rice this year, up from 6.88 million tonnes, worth US$2.89 billion (94 billion baht) last year.
The stockpile will run from March to mid-April, the Vietnam Food Association said, which will affect Vietnam's biggest rice-producing region, the Mekong Delta.
Around 10.3 million tonnes of unhusked rice is expected to be produced in the Mekong Delta during this period, the Ministry of Agriculture and Rural Development said.
Export volume fell sharply in the first two months of this year and is predicted to remain low in the coming months due to weak demand in the global market and strong competition from other rice exporters, including Thailand, India and Myanmar.
A number of rice exporters have asked the government to boost exports to countries including China, Indonesia and the Philippines.
Vietnam plans to export 7 million tonnes of rice this year, up from 6.88 million tonnes, worth US$2.89 billion (94 billion baht) last year.
Thursday 6 March 2014
Bt20 billion ready for rice farmers next week
Farmers who hold pledging receipts issued under the government's rice-pledging scheme last November are expected to be paid next week, in a breakthrough that could ease one of the Yingluck Shinawatra-led government's most serious political problems, at least in the short term.
The Election Commission's board yesterday approved a request by the caretaker government to use an additional Bt20 billion from the national budget to pay the farmers, who are still waiting for payments that were due in November.
The government must return the funds to the budget by May 31.
Caretaker Finance Minister Kittiratt Na-Ranong yesterday clarified to the EC the reasons the government needs the Bt20 billion for the rice-pledging scheme.
After the meeting with Kittiratt, EC member Somchai Srisuthiyakorn posted on his Facebook page that the funds would be considered an advance payment, which would be repaid in full by the Foreign Trade Department to the Finance Ministry by May 31.
The funds to cover the repayment would come from the department's sale of rice from the state's stockpile.
In his Facebook post, Somchai said the EC approved the use of central-budget funds for six reasons.
First, the EC has the power to approve the additional budget, which was requested as an urgent case.
Second, Somchai said, the Bt20 billion is considered borrowing - not expenditure - and the government will have to return all of it after earning money from the sale of rice.
Third, the Public Debt Management Office has assured the EC that the amount will be returned in May, and that the use of the funds will not affect the nation's reserves set aside for emergency cases.
Fourth, the Foreign Trade Department assured the EC that it could earn Bt8 billion a month from rice sales, totalling Bt24 billion over three months.
Fifth, the due date for the return of the funds, May 31, is expected to be within the time frame of the current caretaker government, so the move is unlikely to place any obligations on the next government.
Sixth, the Bt20 billion will be paid to farmers who received pledging receipts in November, before the dissolution of the House of Representatives. Therefore, the payment to the farmers cannot be seen as a move to gain an advantage in the ongoing election.
Somsak Chotrattanasiri, budget director of the Budget Bureau, said yesterday that the Bt20 billion should reach farmers next week via the Bank for Agriculture and Agricultural Cooperatives.
"Using Bt20 billion as an advance payment should not create any problems, as there is still almost Bt70 billion left in the nation's central budget," he said.
Meanwhile, the Foreign Trade Department reported that caretaker Commerce Minister Niwatthumrong Boonsongpaisan had approved the sale of 600,000 tonnes of rice in separate auctions to 11 private companies who took part in bidding, earning a total of Bt20 billion.
Caretaker Deputy Commerce Minister Yanyong Phuangrach said the money from the central budget should reach the farmers over the next week. When combined with money earned from rice sales - which he said should amount to Bt10 billion a month - there should be sufficient funds to pay farmers waiting for payments from December as well.
The Election Commission's board yesterday approved a request by the caretaker government to use an additional Bt20 billion from the national budget to pay the farmers, who are still waiting for payments that were due in November.
The government must return the funds to the budget by May 31.
Caretaker Finance Minister Kittiratt Na-Ranong yesterday clarified to the EC the reasons the government needs the Bt20 billion for the rice-pledging scheme.
After the meeting with Kittiratt, EC member Somchai Srisuthiyakorn posted on his Facebook page that the funds would be considered an advance payment, which would be repaid in full by the Foreign Trade Department to the Finance Ministry by May 31.
The funds to cover the repayment would come from the department's sale of rice from the state's stockpile.
In his Facebook post, Somchai said the EC approved the use of central-budget funds for six reasons.
First, the EC has the power to approve the additional budget, which was requested as an urgent case.
Second, Somchai said, the Bt20 billion is considered borrowing - not expenditure - and the government will have to return all of it after earning money from the sale of rice.
Third, the Public Debt Management Office has assured the EC that the amount will be returned in May, and that the use of the funds will not affect the nation's reserves set aside for emergency cases.
Fourth, the Foreign Trade Department assured the EC that it could earn Bt8 billion a month from rice sales, totalling Bt24 billion over three months.
Fifth, the due date for the return of the funds, May 31, is expected to be within the time frame of the current caretaker government, so the move is unlikely to place any obligations on the next government.
Sixth, the Bt20 billion will be paid to farmers who received pledging receipts in November, before the dissolution of the House of Representatives. Therefore, the payment to the farmers cannot be seen as a move to gain an advantage in the ongoing election.
Somsak Chotrattanasiri, budget director of the Budget Bureau, said yesterday that the Bt20 billion should reach farmers next week via the Bank for Agriculture and Agricultural Cooperatives.
"Using Bt20 billion as an advance payment should not create any problems, as there is still almost Bt70 billion left in the nation's central budget," he said.
Meanwhile, the Foreign Trade Department reported that caretaker Commerce Minister Niwatthumrong Boonsongpaisan had approved the sale of 600,000 tonnes of rice in separate auctions to 11 private companies who took part in bidding, earning a total of Bt20 billion.
Caretaker Deputy Commerce Minister Yanyong Phuangrach said the money from the central budget should reach the farmers over the next week. When combined with money earned from rice sales - which he said should amount to Bt10 billion a month - there should be sufficient funds to pay farmers waiting for payments from December as well.
Tuesday 4 March 2014
Cambodia Rice prices continue to fall
As buyers swoop in to purchase Thai rice at garage-sale prices, Cambodian exporters are dealing with lower than usual rates, and the results are being felt all the way down the supply chain to the farmers themselves.
New figures from rice industry publication Oryza show that the cost for Cambodia’s jasmine rice has declined sharply in recent months, in tandem with falling prices in Thailand brought on by that country’s failed rice-pledging scheme.
“This is a concern for everyone in the rice industry now,” said Khan Kunthy, CEO of Battambang Rice Investment Company, adding that sales have also dropped.
Kunthy said that export volume for the first few months of this year was largely based on orders from 2013.
“There is no good sign of orders for this new year yet,” he said.
In 2011, Thai Prime Minister Yingluck Shinawatra vowed to pay farmers above market rates for their rice.
But stockpiles have accumulated to record levels, flooding the global market with new quantities of supply and driving down prices.
Thai officials estimate that there are 15 to 18 million tons of stockpiled rice. Oryza reported that the Thai government planned to offload at least one million tons per month from January to March.
Thai hom mali rice is now at $955 per ton, a decline of 17 per cent compared to the price in December last year, when it stood at $1,163.
The latest figures from Oryza show that, at the end of February, Cambodia’s jasmine rice cost $885 per ton, a 7 per cent decrease from $950 per ton in December.
“We have no other choice besides lowering our rice price, even if we have to put up with the loss if prices went even lower than they are now, or no one will buy from us,” Kunthy, of Battambang Rice Investment Company, said.
Kunthy, who runs a newly established rice milling operation, is also under pressure to repay the bank for a loan he took out to help set up the mill.
Lim Bun Heng, owner of Loran Company, one of the country’s largest rice exporters, said declines in Cambodia’s jasmine variety will squeeze margins for all involved.
“Cheaper prices of milled rice also mean cheaper prices of paddy rice that the miller will buy from farmers too,” Bun Heng said, adding that “we cannot buy expensive paddy rice and sell it at a lower price”.
Export volumes are also decreasing as buyers look for cheap stockpiled product. Bun Heng said his company experienced a 30 per cent decrease in exports over the first two months of this year.
“The Thais are selling their rice very cheap, so the buyers are switching to Thailand,” he said.
Last year was a time of enormous gains for the rice industry, as export volumes doubled. But the rice scheme has upended the global market, setting back not just Thailand, which used to be the world’s largest exporter, but its neighbours, too.
In January of 2012, Cambodia exported 9,700 tons of rice. Exports for the same period in 2013 jumped to 25,700 tons. But in January, the pace slackened, with only 21,500 tons sent out of the country.
Exporters and rice millers should keep their fragrant rice paddy and wait until the supply in the global market declines, advised Srey Chanty, an independent economist who focuses on agriculture issues.
“I think in the next three or four months, the fragrant rice price will bounce back to normal,” he said.
New figures from rice industry publication Oryza show that the cost for Cambodia’s jasmine rice has declined sharply in recent months, in tandem with falling prices in Thailand brought on by that country’s failed rice-pledging scheme.
“This is a concern for everyone in the rice industry now,” said Khan Kunthy, CEO of Battambang Rice Investment Company, adding that sales have also dropped.
Kunthy said that export volume for the first few months of this year was largely based on orders from 2013.
“There is no good sign of orders for this new year yet,” he said.
In 2011, Thai Prime Minister Yingluck Shinawatra vowed to pay farmers above market rates for their rice.
But stockpiles have accumulated to record levels, flooding the global market with new quantities of supply and driving down prices.
Thai officials estimate that there are 15 to 18 million tons of stockpiled rice. Oryza reported that the Thai government planned to offload at least one million tons per month from January to March.
Thai hom mali rice is now at $955 per ton, a decline of 17 per cent compared to the price in December last year, when it stood at $1,163.
The latest figures from Oryza show that, at the end of February, Cambodia’s jasmine rice cost $885 per ton, a 7 per cent decrease from $950 per ton in December.
“We have no other choice besides lowering our rice price, even if we have to put up with the loss if prices went even lower than they are now, or no one will buy from us,” Kunthy, of Battambang Rice Investment Company, said.
Kunthy, who runs a newly established rice milling operation, is also under pressure to repay the bank for a loan he took out to help set up the mill.
Lim Bun Heng, owner of Loran Company, one of the country’s largest rice exporters, said declines in Cambodia’s jasmine variety will squeeze margins for all involved.
“Cheaper prices of milled rice also mean cheaper prices of paddy rice that the miller will buy from farmers too,” Bun Heng said, adding that “we cannot buy expensive paddy rice and sell it at a lower price”.
Export volumes are also decreasing as buyers look for cheap stockpiled product. Bun Heng said his company experienced a 30 per cent decrease in exports over the first two months of this year.
“The Thais are selling their rice very cheap, so the buyers are switching to Thailand,” he said.
Last year was a time of enormous gains for the rice industry, as export volumes doubled. But the rice scheme has upended the global market, setting back not just Thailand, which used to be the world’s largest exporter, but its neighbours, too.
In January of 2012, Cambodia exported 9,700 tons of rice. Exports for the same period in 2013 jumped to 25,700 tons. But in January, the pace slackened, with only 21,500 tons sent out of the country.
Exporters and rice millers should keep their fragrant rice paddy and wait until the supply in the global market declines, advised Srey Chanty, an independent economist who focuses on agriculture issues.
“I think in the next three or four months, the fragrant rice price will bounce back to normal,” he said.
Cambodian rice trade hit by Thai sales
Thailand's rice sales are quickly pushing down world prices, affecting Cambodia's industry and farmers, according to a report.
New figures from rice industry publication Oryza show the price for Cambodia's jasmine rice has declined sharply in recent months, in line with falling prices in Thailand brought on by the failed rice-pledging scheme.
"This is a concern for everyone in the rice industry now," Khan Kunthy, CEO of Battambang Rice Investment Company, told the Phnom Penh Post, adding sales have also dropped.
Mr Kunthy said export volume for the first few months of this year was largely based on orders from 2013. “There is no good sign of orders for this new year yet,” he said.
But stockpiles have accumulated to record levels, flooding the global market with new quantities of supply and driving down prices.
Thai officials estimate there are 15 to 18 million tonnes of stockpiled rice. Oryza reported that the Thai government planned to offload at least one million tonnes per month from January to March.
Thai hom mali rice is now at $955 a tonne, a decline of 17% compared to the price in December last year, when it stood at $1,163.
The latest figures from Oryza show that, at the end of February, Cambodia’s jasmine rice cost $885 per tonne, a 7% decrease from $950 in December.
“We have no other choice besides lowering our rice price, even if we have to put up with the loss if prices went even lower than they are now, or no one will buy from us,” Mr Kunthy of Battambang Rice Investment Company said.
Mr Kunthy, who runs a newly established rice milling operation, is also under pressure to repay the bank for a loan he took out to help set up the mill.
Lim Bun Heng, owner of Loran Company, one of the country’s largest rice exporters, said declines in Cambodia’s jasmine variety will squeeze margins for all involved.
"Cheaper prices of milled rice also mean cheaper prices of paddy rice that the miller will buy from farmers too," Bun Heng said, adding that “we cannot buy expensive paddy rice and sell it at a lower price".
Export volumes are also decreasing as buyers look for cheap stockpiled product. Bun Heng said his company experienced a 30% in exports over the first two months of this year.
"The Thais are selling their rice very cheap, so the buyers are switching to Thailand," he said.
Last year was a time of enormous gains for the rice industry, as export volumes doubled. But the rice scheme has upended the global market, setting back not just Thailand, which used to be the world’s largest exporter, but its neighbours, too.
In January of 2012, Cambodia exported 9,700 tonnes of rice. Exports for the same period in 2013 jumped to 25,700 tonnes. But this January, the pace slackened, with only 21,500 tonnes sent out of the country.
Exporters and rice millers should keep their fragrant rice paddy and wait until the supply in the global market declines, advised Srey Chanty, an independent economist who focuses on agriculture issues.
“I think in the next three or four months, the fragrant rice price will bounce back to normal,” he said.
New figures from rice industry publication Oryza show the price for Cambodia's jasmine rice has declined sharply in recent months, in line with falling prices in Thailand brought on by the failed rice-pledging scheme.
"This is a concern for everyone in the rice industry now," Khan Kunthy, CEO of Battambang Rice Investment Company, told the Phnom Penh Post, adding sales have also dropped.
Mr Kunthy said export volume for the first few months of this year was largely based on orders from 2013. “There is no good sign of orders for this new year yet,” he said.
But stockpiles have accumulated to record levels, flooding the global market with new quantities of supply and driving down prices.
Thai officials estimate there are 15 to 18 million tonnes of stockpiled rice. Oryza reported that the Thai government planned to offload at least one million tonnes per month from January to March.
Thai hom mali rice is now at $955 a tonne, a decline of 17% compared to the price in December last year, when it stood at $1,163.
The latest figures from Oryza show that, at the end of February, Cambodia’s jasmine rice cost $885 per tonne, a 7% decrease from $950 in December.
“We have no other choice besides lowering our rice price, even if we have to put up with the loss if prices went even lower than they are now, or no one will buy from us,” Mr Kunthy of Battambang Rice Investment Company said.
Mr Kunthy, who runs a newly established rice milling operation, is also under pressure to repay the bank for a loan he took out to help set up the mill.
Lim Bun Heng, owner of Loran Company, one of the country’s largest rice exporters, said declines in Cambodia’s jasmine variety will squeeze margins for all involved.
"Cheaper prices of milled rice also mean cheaper prices of paddy rice that the miller will buy from farmers too," Bun Heng said, adding that “we cannot buy expensive paddy rice and sell it at a lower price".
Export volumes are also decreasing as buyers look for cheap stockpiled product. Bun Heng said his company experienced a 30% in exports over the first two months of this year.
"The Thais are selling their rice very cheap, so the buyers are switching to Thailand," he said.
Last year was a time of enormous gains for the rice industry, as export volumes doubled. But the rice scheme has upended the global market, setting back not just Thailand, which used to be the world’s largest exporter, but its neighbours, too.
In January of 2012, Cambodia exported 9,700 tonnes of rice. Exports for the same period in 2013 jumped to 25,700 tonnes. But this January, the pace slackened, with only 21,500 tonnes sent out of the country.
Exporters and rice millers should keep their fragrant rice paddy and wait until the supply in the global market declines, advised Srey Chanty, an independent economist who focuses on agriculture issues.
“I think in the next three or four months, the fragrant rice price will bounce back to normal,” he said.
Egypt negotiations over resumption of rice exports to begin within next two weeks
Discussions with the Ministry of Supply over resuming rice exports will commence this week or next week, with the aim of reaching an agreement on the “best” possible solution to export rice while benefiting all parties involved, Vice Chairman of the Rice Division in the Federation of Egyptian Industries Mostafa Atallah said on Monday.
Newly-appointed Minister of Supply Khaled Hanafy said Sunday that he would reconsider a decision suspending rice exports, state-owned news agency MENA reported. Hanafy explained that there have been calls to resume rice exports “in order to open new rice markets abroad, and contribute to revitalising the economy”.
Minister of Industry and Foreign Trade Mounir Fakhry Abdel Nour announced last November a bid to export 100,000 tonnes of rice, set to take place from mid-November to January 2014. Abdel Nour said at the time that exporting rice would be “beneficial”, as global prices are high.However, rice exports were suspended in November due to a shortage in quantities “intentionally” created by merchants who had attempted to monopolise the rice market, Atallah explained.According to Atallah, rice exportation was set to begin in September; however, “merchants requested to postpone it to November”. During those two months, merchants collected high quantities of rice in the market in order to control prices, he added. The Ministry of Supply could not determine an adequate quantity for exporting, Atallah said.
Former Minister of Supply Mohamed Abu Shady, under Prime Minister Hazem El-Beblawi’s cabinet, announced in October that rice exports will be halted “until all ration needs of the grain are met”.The government sells 1.4m tonnes of subsidised rice per year, at EGP 1.5 per kilogram, according to Abu Shady.
“I will not pay heed to the interests of a few dozen rice exporters at the expense of domestic markets,” Abu Shady told the Daily News Egypt in a November interview. The minister stated that rice exports will resume, adding that prices of rice hiked from EGP 1,800 a tonne to EGP 2,000.
Egypt produces 6.5m tonnes of rice, of which it uses up 3.5m to 4m tonnes, according to Abu Shady.
In 2012, Egypt exported 650,000 tonnes of rice to 58 countries in Europe and the Arab region, Atallah stated.
Before leaving the ministry, Abu Shady decided on 22 February to refer the head of the central import administration at the General Authority for Supply Administration (GASC) to administrative prosecutors on charges of “corruption”.
Newly-appointed Minister of Supply Khaled Hanafy said Sunday that he would reconsider a decision suspending rice exports, state-owned news agency MENA reported. Hanafy explained that there have been calls to resume rice exports “in order to open new rice markets abroad, and contribute to revitalising the economy”.
Minister of Industry and Foreign Trade Mounir Fakhry Abdel Nour announced last November a bid to export 100,000 tonnes of rice, set to take place from mid-November to January 2014. Abdel Nour said at the time that exporting rice would be “beneficial”, as global prices are high.However, rice exports were suspended in November due to a shortage in quantities “intentionally” created by merchants who had attempted to monopolise the rice market, Atallah explained.According to Atallah, rice exportation was set to begin in September; however, “merchants requested to postpone it to November”. During those two months, merchants collected high quantities of rice in the market in order to control prices, he added. The Ministry of Supply could not determine an adequate quantity for exporting, Atallah said.
Former Minister of Supply Mohamed Abu Shady, under Prime Minister Hazem El-Beblawi’s cabinet, announced in October that rice exports will be halted “until all ration needs of the grain are met”.The government sells 1.4m tonnes of subsidised rice per year, at EGP 1.5 per kilogram, according to Abu Shady.
“I will not pay heed to the interests of a few dozen rice exporters at the expense of domestic markets,” Abu Shady told the Daily News Egypt in a November interview. The minister stated that rice exports will resume, adding that prices of rice hiked from EGP 1,800 a tonne to EGP 2,000.
Egypt produces 6.5m tonnes of rice, of which it uses up 3.5m to 4m tonnes, according to Abu Shady.
In 2012, Egypt exported 650,000 tonnes of rice to 58 countries in Europe and the Arab region, Atallah stated.
Before leaving the ministry, Abu Shady decided on 22 February to refer the head of the central import administration at the General Authority for Supply Administration (GASC) to administrative prosecutors on charges of “corruption”.
Monday 17 February 2014
Rice Exports From India Climbing to Record on Mideast Demand
Rice shipments from India, the world’s largest producer after China, will probably expand to a record as buyers from Iran to Saudi Arabia boost purchases of aromatic basmati grain used in biryani and pilaf dishes.
Exports are set to increase 7.8 percent to 11 million metric tons in the 12 months through March from a year earlier, said M.P. Jindal, president of the All India Rice Exporters Association. Sales of basmati may jump 14 percent to 4 million tons as cargoes of non-basmati varieties advance 4 percent to 7 million tons, he said in a phone interview.
Shipments are increasing from India as Thailand, once the world’s biggest supplier, is also set to boost exports. The Southeast Asian country has built record stockpiles big enough to meet about a third of global import demand under a buying program that started in 2011. Farmers are demanding the government sell the reserves to pay for their crop.
“India has an edge over other countries because of quality and price competitiveness,” said Faiyaz Hudani, an associate vice president at Kotak Commodity Services Ltd., a Mumbai-based broker. “When the output is high and the pace of growth is stable, there is no cause of concern.”
Rising sales may benefit Indian shippers such as KRBL Ltd. (KRB), LT Foods Ltd. (LTFO) and Kohinoor Foods Ltd. (KFL)
India is targeting production of 106.3 million tons in the year through June, compared with a record 105.3 million tons in 2011-2012, according to the Agriculture Ministry. The harvest would add to global inventories estimated at 109 million tons in 2013-2014 by the London-based International Grains Council.
Thai Stockpiles
The price of Thai 5-percent broken white rice, a benchmark grade, fell 23 percent in 2013, the most in at least five years, and was at $460 a ton yesterday. A slump to $370 by March is possible as grain is offloaded from state granaries, according to Chareon Laothamatas, president of the Thai Rice Exporters Association. Rough-rice futures on the Chicago Board of Trade rose 0.6 percent to $15.625 per 100 pounds yesterday.
Thailand may not be able to find enough buyers for its stockpiles because major importers in Africa and the Philippines increasingly prefer grain from Vietnam and India, according to Darren Cooper, a senior economist at the council.
“Thailand will try to dispose of the stockpiles at whatever price it gets,” said B.V. Krishna Rao, managing director of Pattabhi Agro Foods Pvt., an Indian exporter. Shipments may not be affected by rising Thai sales as the two countries catered to different markets, he said.
Basmati Demand
The U.S. Department of Agriculture expects Thai inventories to reach a record 14.7 million tons this year, compared with 6.1 million in 2010. Shipments will probably be 8.5 million tons, the USDA forecasts.
Basmati rice exports from India are climbing as Iran is building reserves, said Jindal at the exporters association. Sales to Iran jumped to 1.28 million tons in the nine months through December, exceeding the 1.07 million tons for whole of 2012-2013, according to the association. The country is India’s biggest buyer of basmati and imports 1.5 million tons annually.
“The price of basmati was good this year and overseas demand was more throughout the year from all countries including Iran and Saudi Arabia,” Jindal said on Feb. 4. “Exports to Iran are higher as it buys for keeping certain reserves.”
India supplies 65 percent of the overseas basmati rice market, while Pakistan accounts for the rest, according to the state-run Agricultural and Processed Food Products Export Development Authority. Saudi Arabia and Iran are the two major buyers of Indian basmati, while Africa is a major destination for non-basmati varieties.
Exports are set to increase 7.8 percent to 11 million metric tons in the 12 months through March from a year earlier, said M.P. Jindal, president of the All India Rice Exporters Association. Sales of basmati may jump 14 percent to 4 million tons as cargoes of non-basmati varieties advance 4 percent to 7 million tons, he said in a phone interview.
Shipments are increasing from India as Thailand, once the world’s biggest supplier, is also set to boost exports. The Southeast Asian country has built record stockpiles big enough to meet about a third of global import demand under a buying program that started in 2011. Farmers are demanding the government sell the reserves to pay for their crop.
“India has an edge over other countries because of quality and price competitiveness,” said Faiyaz Hudani, an associate vice president at Kotak Commodity Services Ltd., a Mumbai-based broker. “When the output is high and the pace of growth is stable, there is no cause of concern.”
Rising sales may benefit Indian shippers such as KRBL Ltd. (KRB), LT Foods Ltd. (LTFO) and Kohinoor Foods Ltd. (KFL)
India is targeting production of 106.3 million tons in the year through June, compared with a record 105.3 million tons in 2011-2012, according to the Agriculture Ministry. The harvest would add to global inventories estimated at 109 million tons in 2013-2014 by the London-based International Grains Council.
Thai Stockpiles
The price of Thai 5-percent broken white rice, a benchmark grade, fell 23 percent in 2013, the most in at least five years, and was at $460 a ton yesterday. A slump to $370 by March is possible as grain is offloaded from state granaries, according to Chareon Laothamatas, president of the Thai Rice Exporters Association. Rough-rice futures on the Chicago Board of Trade rose 0.6 percent to $15.625 per 100 pounds yesterday.
Thailand may not be able to find enough buyers for its stockpiles because major importers in Africa and the Philippines increasingly prefer grain from Vietnam and India, according to Darren Cooper, a senior economist at the council.
“Thailand will try to dispose of the stockpiles at whatever price it gets,” said B.V. Krishna Rao, managing director of Pattabhi Agro Foods Pvt., an Indian exporter. Shipments may not be affected by rising Thai sales as the two countries catered to different markets, he said.
Basmati Demand
The U.S. Department of Agriculture expects Thai inventories to reach a record 14.7 million tons this year, compared with 6.1 million in 2010. Shipments will probably be 8.5 million tons, the USDA forecasts.
Basmati rice exports from India are climbing as Iran is building reserves, said Jindal at the exporters association. Sales to Iran jumped to 1.28 million tons in the nine months through December, exceeding the 1.07 million tons for whole of 2012-2013, according to the association. The country is India’s biggest buyer of basmati and imports 1.5 million tons annually.
“The price of basmati was good this year and overseas demand was more throughout the year from all countries including Iran and Saudi Arabia,” Jindal said on Feb. 4. “Exports to Iran are higher as it buys for keeping certain reserves.”
India supplies 65 percent of the overseas basmati rice market, while Pakistan accounts for the rest, according to the state-run Agricultural and Processed Food Products Export Development Authority. Saudi Arabia and Iran are the two major buyers of Indian basmati, while Africa is a major destination for non-basmati varieties.
Thailand Govt rice auction met with bidding frenzy
The Department of Foreign Trade (DFT) has opened an auction of 467,000 tons of rice from the government’s stockpile amid a lively atmosphere, with up to 18 companies participating and more than 10 billion baht expected to be generated.
According to DFT Director-General Surasak Riangkrul, the auction was organized to release the rice the government had accepted from farmers under the rice pledging scheme. The rice put up for grabs comprised in-season rice from the 2011-2012 harvest season and off-season rice from the 2012 and 2012-2013 harvest seasons. Out of the 467,000 tons, about 367,000 tons was for domestic sales while the other 100,000 tons was for export.
On this occasion, 20 envelopes were handed in by 18 bidders, 15 envelopes for domestic sales and the other 5 for export. Tomorrow, the committee in charge of releasing the stockpiled rice is scheduled to open all the envelopes and negotiate with each bidder in order to secure the best prices possible. Mr Surasak said the department expected to raise over 10 billion baht from this auction.
To speed up the rice release, the director-general disclosed that the DFT would be holding as many as 2-3 rice auctions a month from now on, with the next lot of over 500,000 tons to be available for bidding next week.
Mr Surasak said 2.2 million tons of rice had been auctioned off so far while about 170-180 billion baht had been generated and paid back to the Ministry of Finance.
According to DFT Director-General Surasak Riangkrul, the auction was organized to release the rice the government had accepted from farmers under the rice pledging scheme. The rice put up for grabs comprised in-season rice from the 2011-2012 harvest season and off-season rice from the 2012 and 2012-2013 harvest seasons. Out of the 467,000 tons, about 367,000 tons was for domestic sales while the other 100,000 tons was for export.
On this occasion, 20 envelopes were handed in by 18 bidders, 15 envelopes for domestic sales and the other 5 for export. Tomorrow, the committee in charge of releasing the stockpiled rice is scheduled to open all the envelopes and negotiate with each bidder in order to secure the best prices possible. Mr Surasak said the department expected to raise over 10 billion baht from this auction.
To speed up the rice release, the director-general disclosed that the DFT would be holding as many as 2-3 rice auctions a month from now on, with the next lot of over 500,000 tons to be available for bidding next week.
Mr Surasak said 2.2 million tons of rice had been auctioned off so far while about 170-180 billion baht had been generated and paid back to the Ministry of Finance.
Why Rice Is Heating Up Politics in Thailand and the Philippines
Rice is a staple food in Southeast Asia, which explains why many politicians panic when rice farmers are agitated or when consumers complain about high prices. Today, rice farmers in Thailand are protesting after the national government repeatedly failed to pay them under the rice pledging program. In the Philippines, the issue of unabated rice smuggling has alarmed many sectors, prompting government agencies to conduct a thorough investigation about the matter.
Introduced in 2011 after the election victory of Prime Minister Yingluck Shinawatra, the rice subsidy program involved the government buying the rice output of local farmers at a high price before reselling it to the global market. The program was meant to improve the savings of farmers, although critics derided it as a wasteful populist policy.
The government reduced the subsidy price six months ago to offset the huge losses incurred by the program, but farmers were still assured that they would get paid for their products. But the money didn’t arrive and in fact the delayed payments have already reached 130 billion baht ($4 billion) affecting more than a million farmers.
Burdened with rising debt, desperate and angry rice farmers marched to Bangkok last week demanding payment from the government. They blocked several roads near Bangkok and camped in front of the Ministry of Commerce.
A majority of the farmer-protesters are not affiliated with anti-government groups behind the Bangkok Shutdown campaign, but their arrival in the city has intensified the country’s political crisis.
The opposition has expressed support to the protesting farmers and has initiated a donation campaign to help sustain the protest in the city. The opposition is also blaming corruption under the Yingluck government for the present suffering of rice farmers.
For its part, the government said it was unable to pay farmers because of the ongoing protests.. It urged protesters not to block or occupy government banks.
The government also assured farmers that it would find a way to deliver the payments. It also rejected criticism that the rice subsidy program has become a disastrous populist policy, stating that “[the] ultimate goal of the rice pledging scheme is not the government’s popularity, but simply the upgrade of income security for the better lives of farmers, and for the better future of our posterity since rice farming means growing the better future on our own land without any impact to the country’s monetary and fiscal disciplines.”
Yingluck cannot afford to ignore the farmers since many of them came from villages that supported her party in the recent election. But she should also heed the advice of many economists who earlier warned her administration that the rice subsidy program needs to be revised.
Moving on to the Philippines, rice smuggling has resurfaced as a top political issue after it was reported that 50,000 metric tons of rice was smuggled into the country weekly in 2013. The Philippines was the world’s top rice importer in 2011.
In response, Congress has conducted a probe to pinpoint the suspected rice smugglers in the country. They also urged the government to fast track the resolution of the 157 rice smuggling cases.
“Smuggling is hurting our economy and it is hurting severely the livelihood of our poor rural farmers, who spend their entire days toiling under the sun to ensure that we would have food on our table, only to be thwarted by those who engage in rice smuggling,” said Senate President Franklin Drilon.
Recently, the Department of Justice claimed that it has already arrested the “king of rice smugglers.” But some are doubtful if the government caught the real mastermind behind the smuggling ring. Local traders are also demanding the arrest of other rice smuggling syndicates who are in cahoots with local politicians and customs officials.
What is further needed is the stamping out of corruption in the government’s rice importation program. Perhaps President Benigno Aquino III, who promised rice self-sufficiency before the end of his term in 2016, should look closely into the issue.
Thailand’s protesting rice farmers and the Philippines’ rice smuggling scandal demonstrate why rice is more than just a staple food in Southeast Asia. It is an important political commodity that can affect election results and even ignite a social uprising.
Introduced in 2011 after the election victory of Prime Minister Yingluck Shinawatra, the rice subsidy program involved the government buying the rice output of local farmers at a high price before reselling it to the global market. The program was meant to improve the savings of farmers, although critics derided it as a wasteful populist policy.
The government reduced the subsidy price six months ago to offset the huge losses incurred by the program, but farmers were still assured that they would get paid for their products. But the money didn’t arrive and in fact the delayed payments have already reached 130 billion baht ($4 billion) affecting more than a million farmers.
Burdened with rising debt, desperate and angry rice farmers marched to Bangkok last week demanding payment from the government. They blocked several roads near Bangkok and camped in front of the Ministry of Commerce.
A majority of the farmer-protesters are not affiliated with anti-government groups behind the Bangkok Shutdown campaign, but their arrival in the city has intensified the country’s political crisis.
The opposition has expressed support to the protesting farmers and has initiated a donation campaign to help sustain the protest in the city. The opposition is also blaming corruption under the Yingluck government for the present suffering of rice farmers.
For its part, the government said it was unable to pay farmers because of the ongoing protests.. It urged protesters not to block or occupy government banks.
The government also assured farmers that it would find a way to deliver the payments. It also rejected criticism that the rice subsidy program has become a disastrous populist policy, stating that “[the] ultimate goal of the rice pledging scheme is not the government’s popularity, but simply the upgrade of income security for the better lives of farmers, and for the better future of our posterity since rice farming means growing the better future on our own land without any impact to the country’s monetary and fiscal disciplines.”
Yingluck cannot afford to ignore the farmers since many of them came from villages that supported her party in the recent election. But she should also heed the advice of many economists who earlier warned her administration that the rice subsidy program needs to be revised.
Moving on to the Philippines, rice smuggling has resurfaced as a top political issue after it was reported that 50,000 metric tons of rice was smuggled into the country weekly in 2013. The Philippines was the world’s top rice importer in 2011.
In response, Congress has conducted a probe to pinpoint the suspected rice smugglers in the country. They also urged the government to fast track the resolution of the 157 rice smuggling cases.
“Smuggling is hurting our economy and it is hurting severely the livelihood of our poor rural farmers, who spend their entire days toiling under the sun to ensure that we would have food on our table, only to be thwarted by those who engage in rice smuggling,” said Senate President Franklin Drilon.
Recently, the Department of Justice claimed that it has already arrested the “king of rice smugglers.” But some are doubtful if the government caught the real mastermind behind the smuggling ring. Local traders are also demanding the arrest of other rice smuggling syndicates who are in cahoots with local politicians and customs officials.
What is further needed is the stamping out of corruption in the government’s rice importation program. Perhaps President Benigno Aquino III, who promised rice self-sufficiency before the end of his term in 2016, should look closely into the issue.
Thailand’s protesting rice farmers and the Philippines’ rice smuggling scandal demonstrate why rice is more than just a staple food in Southeast Asia. It is an important political commodity that can affect election results and even ignite a social uprising.
Rice Tumbling as Thailand’s Unpaid Farmers Urge Reserve Sale
Thai rice farmer Pakasit Jamjaras usually spends his days tilling soil, just like his forefathers. Now he’s been harvesting signatures instead of grain, with a petition to King Bhumibol Adulyadej because the government hasn’t paid for his crop in five months.
“We are heavily indebted,” Pakasit, a 47-year-old father of three, said by telephone from Phichit province, about 350 kilometers (217 miles) north of Bangkok. “We need to repay suppliers of fertilizers and others.”
Thailand, once the world’s biggest exporter, is short of funds to help growers under Prime Minister Yingluck Shinawatra’s 2011 program to buy the crop at above-market rates. After the government built record stockpiles big enough to meet about a third of global import demand, exports and prices have dropped, farmers aren’t being paid, and the program is the target of anti-corruption probes. Political unrest may contribute to slower growth in Southeast Asia’s second-largest economy.
Selling the government inventory to pay farmers would flood the market with rice, eroding prices that in 2013 fell by the most in at least five years, and would escalate competition for shippers in Asia, including India, Vietnam and Cambodia.
“The program is simply unsustainable and hurting the finances of the country,” said Concepcion Calpe, a senior economist in Rome for the United Nations’ Food & Agriculture Organization. “The suspension of the rice-pledging program will exacerbate the decline in Thai market prices as farmers enrolled in the program increasingly fail to be paid.”
Protests against Yingluck by farmers, who blocked roads in the provinces, added to opposition in Bangkok that led to deadly conflicts. Months of demonstrations led by Suthep Thaugsuban, a former opposition-party power broker, paralyzed parts of the capital and disrupted a national election on Feb. 2. Yingluck heads a caretaker administration until a new government is formed. Thailand, a constitutional monarchy since 1932, had nine coups since 1946, when King Bhumibol assumed the throne.
The price of Thai 5-percent broken white rice, a benchmark grade, tumbled 23 percent last year and was at $460 a metric ton today. A slump to $370 by March is possible as more grain is offloaded from state granaries, according to Chareon Laothamatas, president of the Thai Rice Exporters Association. It may take about five years for the state stockpiles to be sold off, Chareon said on Feb. 5.
Yingluck’s program was intended to boost farmers’ incomes and lift prices when it began in October 2011. Instead, Thailand was dethroned as the top exporter as reserves surged. After exporting 10.65 million tons in 2011, shipments slid to 6.7 million last year, behind India and Vietnam, U.S. Department of Agriculture data show. Shipments are seen at 8.5 million tons this year, the USDA forecasts.
The government spent 689 billion baht ($21 billion) in the past two crop years buying from farmers at prices that were as much as 76 percent higher than current market rates. The USDA expects that Thai inventories will reach a record 14.7 million tons this year, compared with 6.1 million in 2010.
As stockpiles grew, so did the strain on government finances. Moody’s Investors Service said in June losses from rice subsidies were credit negative for Thailand’s sovereign rating. The International Monetary Fund, the global lender based in Washington, urged the government in November to replace the policy, saying that it was hurting confidence in public finances. Kittiratt Na-Ranong, Thailand’s finance minister at the time, responded to the IMF’s assessment by saying that “the government has our ways to help farmers.”
The National Anti-Corruption Commission said last month it will investigate Yingluck’s role as overseer of the program, after finding enough evidence to charge 15 people, including former Commerce Minister Boonsong Teriyapirom. Boonsong said Jan. 16 said that the charge was unfair and he would fight it.
After the commission’s announcement, China’s Heilongjiang province dropped a plan to buy 1.2 million tons from Thailand, a sign that the probe had eroded the confidence of the buyer, caretaker Deputy Prime Minister and Commerce Minister Niwattumrong Boonsongpaisan said on Feb. 4.
Yingluck defended the program on Feb. 6, saying that over the past two years the government succeeded in lifting farmers’ incomes, according to a post on her Facebook page. Her caretaker government has limited authority, she wrote. Under the Thai constitution, a caretaker administration can’t borrow new debt or commit to new loans that would obligate the next government.
“We are heavily indebted,” Pakasit, a 47-year-old father of three, said by telephone from Phichit province, about 350 kilometers (217 miles) north of Bangkok. “We need to repay suppliers of fertilizers and others.”
Thailand, once the world’s biggest exporter, is short of funds to help growers under Prime Minister Yingluck Shinawatra’s 2011 program to buy the crop at above-market rates. After the government built record stockpiles big enough to meet about a third of global import demand, exports and prices have dropped, farmers aren’t being paid, and the program is the target of anti-corruption probes. Political unrest may contribute to slower growth in Southeast Asia’s second-largest economy.
Selling the government inventory to pay farmers would flood the market with rice, eroding prices that in 2013 fell by the most in at least five years, and would escalate competition for shippers in Asia, including India, Vietnam and Cambodia.
“The program is simply unsustainable and hurting the finances of the country,” said Concepcion Calpe, a senior economist in Rome for the United Nations’ Food & Agriculture Organization. “The suspension of the rice-pledging program will exacerbate the decline in Thai market prices as farmers enrolled in the program increasingly fail to be paid.”
Protests against Yingluck by farmers, who blocked roads in the provinces, added to opposition in Bangkok that led to deadly conflicts. Months of demonstrations led by Suthep Thaugsuban, a former opposition-party power broker, paralyzed parts of the capital and disrupted a national election on Feb. 2. Yingluck heads a caretaker administration until a new government is formed. Thailand, a constitutional monarchy since 1932, had nine coups since 1946, when King Bhumibol assumed the throne.
The price of Thai 5-percent broken white rice, a benchmark grade, tumbled 23 percent last year and was at $460 a metric ton today. A slump to $370 by March is possible as more grain is offloaded from state granaries, according to Chareon Laothamatas, president of the Thai Rice Exporters Association. It may take about five years for the state stockpiles to be sold off, Chareon said on Feb. 5.
Yingluck’s program was intended to boost farmers’ incomes and lift prices when it began in October 2011. Instead, Thailand was dethroned as the top exporter as reserves surged. After exporting 10.65 million tons in 2011, shipments slid to 6.7 million last year, behind India and Vietnam, U.S. Department of Agriculture data show. Shipments are seen at 8.5 million tons this year, the USDA forecasts.
The government spent 689 billion baht ($21 billion) in the past two crop years buying from farmers at prices that were as much as 76 percent higher than current market rates. The USDA expects that Thai inventories will reach a record 14.7 million tons this year, compared with 6.1 million in 2010.
As stockpiles grew, so did the strain on government finances. Moody’s Investors Service said in June losses from rice subsidies were credit negative for Thailand’s sovereign rating. The International Monetary Fund, the global lender based in Washington, urged the government in November to replace the policy, saying that it was hurting confidence in public finances. Kittiratt Na-Ranong, Thailand’s finance minister at the time, responded to the IMF’s assessment by saying that “the government has our ways to help farmers.”
The National Anti-Corruption Commission said last month it will investigate Yingluck’s role as overseer of the program, after finding enough evidence to charge 15 people, including former Commerce Minister Boonsong Teriyapirom. Boonsong said Jan. 16 said that the charge was unfair and he would fight it.
After the commission’s announcement, China’s Heilongjiang province dropped a plan to buy 1.2 million tons from Thailand, a sign that the probe had eroded the confidence of the buyer, caretaker Deputy Prime Minister and Commerce Minister Niwattumrong Boonsongpaisan said on Feb. 4.
Yingluck defended the program on Feb. 6, saying that over the past two years the government succeeded in lifting farmers’ incomes, according to a post on her Facebook page. Her caretaker government has limited authority, she wrote. Under the Thai constitution, a caretaker administration can’t borrow new debt or commit to new loans that would obligate the next government.
Thailand govt says cannot renew rice scheme expiring end-Feb
The Thai government said on Tuesday it could not renew its controversial rice-buying scheme when it expires at the end of February because it has no authority to do so.
"We are just a caretaker government, which has no power to extend any policy. The rice-buying scheme will end automatically on February 28," Varathep Rattanakorn, a minister in the prime minister's office, told Reuters.
The scheme introduced by Prime Minister Yingluck Shinawatra in 2011 pays farmers way above the market price for their rice, but that has made the grain uncompetitive on world markets. The government has found it difficult to sell and the programme has run into funding problems, leaving many farmers waiting months for payment.
"We are just a caretaker government, which has no power to extend any policy. The rice-buying scheme will end automatically on February 28," Varathep Rattanakorn, a minister in the prime minister's office, told Reuters.
The scheme introduced by Prime Minister Yingluck Shinawatra in 2011 pays farmers way above the market price for their rice, but that has made the grain uncompetitive on world markets. The government has found it difficult to sell and the programme has run into funding problems, leaving many farmers waiting months for payment.
Myanmar rice companies benefit from Thai expertise
Rice in Myanmar is not just a staple food for its people, it is also one of the country's key industries.
It is believed that in 2011 alone, Myanmar's rice sector contributed about 13 per cent of the country's GDP. That GDP figure will only grow provided Myanmar partners other reputable international rice firms, like those in neighbouring Thailand.
Nay Lin Zin, joint secretary of the Myanmar Rice Millers' Association, said: "Nowadays, Thailand people very interested to invest in Myanmar and to cooperate with us because of Thailand's political instability and the price of Thai rice, (which is) higher than other competing rice exporting countries."
In recent months, many Thai rice exporters have been introducing their clients to Myanmar companies.
Kyaw Myo Htoon, director of the Ayeyar Hinthar Group of Companies, said: "Their motivation for Thai traders is they want to maintain relationship with buyers like the Chinese, because they are very big... So in order to do that, they bring their buyers here to introduce Myanmar rice to them.
"They help us to introduce the Myanmar rice variety to the world market... Especially Chinese buyers, they buy the Myanmar rice for industrial usage like making rice noodles, making rice wine as well as they're mixing with other varieties of rice. They mix and sell it to Chinese consumers."
Such collaborative efforts will also enable Myanmar to learn from their Thai partners' technological know-how, paving the way for them to tap onto their neighbour's existing pool of rice consumers.
Nay Lin Zin added: "If the Thailand business can cooperate with us, we can give more money to our people, to our Myanmar farmers and we can produce quality rice for a new market.
"I think after 2015 by cooperating with Thailand business people, especially in the rice sector, I think we can promote our rice export and we can increase our world ranking very soon."
Rice traders said many are happy that Myanmar is now starting to export more rice overseas. That is because 70 per cent of Myanmar's population live in rural areas and they are closely associated with the rice industry.
They say that if rice farmers are happy, that will snowball into other benefits, such as the ability to purchase more expensive goods and in greater quantities.
It is believed that in 2011 alone, Myanmar's rice sector contributed about 13 per cent of the country's GDP. That GDP figure will only grow provided Myanmar partners other reputable international rice firms, like those in neighbouring Thailand.
Nay Lin Zin, joint secretary of the Myanmar Rice Millers' Association, said: "Nowadays, Thailand people very interested to invest in Myanmar and to cooperate with us because of Thailand's political instability and the price of Thai rice, (which is) higher than other competing rice exporting countries."
In recent months, many Thai rice exporters have been introducing their clients to Myanmar companies.
Kyaw Myo Htoon, director of the Ayeyar Hinthar Group of Companies, said: "Their motivation for Thai traders is they want to maintain relationship with buyers like the Chinese, because they are very big... So in order to do that, they bring their buyers here to introduce Myanmar rice to them.
"They help us to introduce the Myanmar rice variety to the world market... Especially Chinese buyers, they buy the Myanmar rice for industrial usage like making rice noodles, making rice wine as well as they're mixing with other varieties of rice. They mix and sell it to Chinese consumers."
Such collaborative efforts will also enable Myanmar to learn from their Thai partners' technological know-how, paving the way for them to tap onto their neighbour's existing pool of rice consumers.
Nay Lin Zin added: "If the Thailand business can cooperate with us, we can give more money to our people, to our Myanmar farmers and we can produce quality rice for a new market.
"I think after 2015 by cooperating with Thailand business people, especially in the rice sector, I think we can promote our rice export and we can increase our world ranking very soon."
Rice traders said many are happy that Myanmar is now starting to export more rice overseas. That is because 70 per cent of Myanmar's population live in rural areas and they are closely associated with the rice industry.
They say that if rice farmers are happy, that will snowball into other benefits, such as the ability to purchase more expensive goods and in greater quantities.
Tuesday 11 February 2014
China pulls out of Thailand rice deal
China has cancelled a deal to buy 1.2 million tonnes of Thai rice, about 14% of the country’s annual exports, amid a corruption probe into Bangkok’s troubled agricultural subsidies scheme, Financial Times reported. Beijing was spooked by the Thai national anti-graft agency’s investigation into the rice price support program, Thailand’s commerce minister said. A Thai bank also pulled its support for the project, whose funding shortages are triggering protests from unpaid farmers. The rice scheme’s growing problems are piling pressure on Yingluck Shinawatra, the prime minister, as the opposition tries to unseat her.
Ministry turns to rice millers for help
The Commerce Ministry yesterday turned to rice millers for assistance, asking them to pay about half of the rice-pledging amount owed to farmers.
The ministry came up with the proposal after thousands of farmers rallied in front of the ministry's compound in Nonthaburi.
The caretaker government has failed to secure funds to pay the rice farmers taking part in the pledging scheme.
However, protesting farmers rejected the proposal and demanded the government pay them within three days.
Caretaker Deputy Commerce Minister Yanyong Phuangrach said the ministry would ask the Thai Rice Mills Association to accept the pledging tickets from the rice growers and pay about 50-60% of the amount owed to them.
Mr Yanyong said the government would absorb the interest payments. The rice millers were expected to charge 0-9% interest rates.
The farmers would pay the millers when they are paid full amounts by the Bank for Agriculture and Agricultural Cooperatives.
Mr Yanyong said the caretaker government would seek permission from the Election Commission to get 1.2 billion baht of central budget funds to pay the interest.
According to the minister, the proposal could be implemented this month if the millers agreed to help.
Manat Kitprasert, president of the Thai Rice Mills Association, initially agreed with the proposal, but noted the millers would have to discuss the matter in detail.
Prasit Boonchoey, president of the Thai Farmers Association, said he doubted the proposal could be implemented, saying the caretaker government is not authorised to act as a loan guarantor.
He said rice millers would need to seek loans from commercial banks and they would need the government as a guarantor.
"If the government can't sell the rice, it should resign within 15 days. I believe the funds will pour in," Mr Prasit said.
He said the farmers were not happy with their talks yesterday with senior commerce officials. The farmers demanded the government open the rice warehouses for stock checking and speed up rice sales.
Wutthichai Duangrat, deputy permanent secretary for commerce, said the ministry could not respond to the farmers' demand and it could only forward the matter to Commerce Minister Niwatthamrong Bunsongphaisan.
Mr Prasit said the farmers would stay put in front of the Commerce Ministry for three days pending the payments.
A group of farmers in the North yesterday submitted a petition to the Office of His Majesty's Principal Private Secretary seeking help after the government failed to make payments.
The ministry came up with the proposal after thousands of farmers rallied in front of the ministry's compound in Nonthaburi.
The caretaker government has failed to secure funds to pay the rice farmers taking part in the pledging scheme.
However, protesting farmers rejected the proposal and demanded the government pay them within three days.
Caretaker Deputy Commerce Minister Yanyong Phuangrach said the ministry would ask the Thai Rice Mills Association to accept the pledging tickets from the rice growers and pay about 50-60% of the amount owed to them.
Mr Yanyong said the government would absorb the interest payments. The rice millers were expected to charge 0-9% interest rates.
The farmers would pay the millers when they are paid full amounts by the Bank for Agriculture and Agricultural Cooperatives.
Mr Yanyong said the caretaker government would seek permission from the Election Commission to get 1.2 billion baht of central budget funds to pay the interest.
According to the minister, the proposal could be implemented this month if the millers agreed to help.
Manat Kitprasert, president of the Thai Rice Mills Association, initially agreed with the proposal, but noted the millers would have to discuss the matter in detail.
Prasit Boonchoey, president of the Thai Farmers Association, said he doubted the proposal could be implemented, saying the caretaker government is not authorised to act as a loan guarantor.
He said rice millers would need to seek loans from commercial banks and they would need the government as a guarantor.
"If the government can't sell the rice, it should resign within 15 days. I believe the funds will pour in," Mr Prasit said.
He said the farmers were not happy with their talks yesterday with senior commerce officials. The farmers demanded the government open the rice warehouses for stock checking and speed up rice sales.
Wutthichai Duangrat, deputy permanent secretary for commerce, said the ministry could not respond to the farmers' demand and it could only forward the matter to Commerce Minister Niwatthamrong Bunsongphaisan.
Mr Prasit said the farmers would stay put in front of the Commerce Ministry for three days pending the payments.
A group of farmers in the North yesterday submitted a petition to the Office of His Majesty's Principal Private Secretary seeking help after the government failed to make payments.
Myanmar Rice exports falter on illicit China trade
Rice exports this year are set to fall to less than half of the government target of 3 million-tonnes as traders are withholding stock from its trading partners in an attempt to secure more favourable prices being offered by illicit Chinese importers, officials said.
U Lu Maw Myint Maung, joint secretary general of the Myanmar Rice Federation, told The Myanmar Times, that Myanmar exported nearly 1 million tonnes of rice through the first nine months of the fiscal year at the end of January, falling short of the 1.01 million tonnes of rice exported during the same period last year.
“Because of an unstable local rice price, we have not been able to speed up exports during the rainy season, he said. “If we had, Myanmar would probably have been able to export about 2 million tonnes this year, because there is enough reserve.”
He said that traders are increasingly looking to sell rice through Shan State’s Muse border, alongside China’s Yunnan Province, where they can earn as much as 28 percent more profit by dealing with tax-dodging Chinese
importers.
Though there is nothing illicit about local rice sellers trading over the borders, many Chinese traders are subject to a 17pc import tax on all rice bought from Myanmar, a tax many choose not to pay, he said. While they are then able to offer a better premium on imports, they also tend to not honour contacts and pay significantly less than promised.
“Local traders would not easily be able to reclaim their rice back because of the high transportation charges and would have to sell at the lower price,” U Lu Maw Myint Maung said. “This led to fluctuations in the local price, so that big exporters could not draw up contracts for as much as we
wanted.”
He said that the price of 25pc broken rice on the international market goes for US$315-$320 per tonne. That is compared to the 2480 yuan ($404) the same rice is sometimes sold for through the Muse border. Five percent broken rice, meanwhile, is sold for $405-$415 per tonne in the international markets, well short of the 2740 Yuan (about $446) per tonne it fetches along the Yunnan border.
In an effort to deal with the problem, the government has been in talks with Chinese authorities to try and formalise the rice trade, U Maung Aung, an adviser to the Ministry of Commerce he told The Myanmar Times.
“We have been trying to sign an MOU [memorandum of understanding] with regional governments in China to permit importing rice from Myanmar legally,” he said.
“Although they have not permitted rice imports, market demand is very big, so they seize illicit rice imports from Myanmar only sometimes,” he said.
As a result, experts believe that the price being offered by illicit traders in China would likely not begin to decrease until the end of the high trading season.
“The price [of rice exported to China] is not likely to go down until March as we are now exporting 3000 to 3500 tonnes of rice through Muse a day,” said U Thauk Kyar, an executive member of the Muse rice traders’ association.
The fiscal 2012-2013 total of 1.6 million tonnes was the highest in 46 years, thanks to the demand from China for exports via the newly booming Muse border post, which accounted for 60pc of the total 1.6 million tonnes exported last year, said U Lu Maw Myint Maung, adding that China has faced in increased demand for quality rice over the past year.
However, with Myanmar’s entry into the EU generalised system of preferences last year, Myanmar traders have started to export to Europe, said U Lu Maw Myint Maung.
“EU traders can import rice from Myanmar without paying import taxes if they can prove the country of origin,” he said.
Former joint secretary of the Myanmar Rice Federation and rice exporter U Myo Thura Aye said that 10 EU countries, including Spain, Portugal, Belgium and the Netherlands, are now buying rice from Myanmar.
“We’re exporting 5000 tonnes a month to Europe and 20,000 tonnes to Africa,” he said, adding that a smaller amount is going to the Philippines and Malaysia.
In addition, Myanmar Agribusiness Public Corporation (MACPO) announced last week that come May they will export up to 8000 tonnes of rice to Japan this year, said U Soe Tun, the company’s director.
“MAPCO is going to export … rice to Japan jointly with Japanese firm Mitsui & Co after it won a tender of Japanese government to import rice,” he said, adding that they would start importing 5pc broken rice at $470 per tonne.
By Zaw Htike
U Lu Maw Myint Maung, joint secretary general of the Myanmar Rice Federation, told The Myanmar Times, that Myanmar exported nearly 1 million tonnes of rice through the first nine months of the fiscal year at the end of January, falling short of the 1.01 million tonnes of rice exported during the same period last year.
“Because of an unstable local rice price, we have not been able to speed up exports during the rainy season, he said. “If we had, Myanmar would probably have been able to export about 2 million tonnes this year, because there is enough reserve.”
He said that traders are increasingly looking to sell rice through Shan State’s Muse border, alongside China’s Yunnan Province, where they can earn as much as 28 percent more profit by dealing with tax-dodging Chinese
importers.
Though there is nothing illicit about local rice sellers trading over the borders, many Chinese traders are subject to a 17pc import tax on all rice bought from Myanmar, a tax many choose not to pay, he said. While they are then able to offer a better premium on imports, they also tend to not honour contacts and pay significantly less than promised.
“Local traders would not easily be able to reclaim their rice back because of the high transportation charges and would have to sell at the lower price,” U Lu Maw Myint Maung said. “This led to fluctuations in the local price, so that big exporters could not draw up contracts for as much as we
wanted.”
He said that the price of 25pc broken rice on the international market goes for US$315-$320 per tonne. That is compared to the 2480 yuan ($404) the same rice is sometimes sold for through the Muse border. Five percent broken rice, meanwhile, is sold for $405-$415 per tonne in the international markets, well short of the 2740 Yuan (about $446) per tonne it fetches along the Yunnan border.
In an effort to deal with the problem, the government has been in talks with Chinese authorities to try and formalise the rice trade, U Maung Aung, an adviser to the Ministry of Commerce he told The Myanmar Times.
“We have been trying to sign an MOU [memorandum of understanding] with regional governments in China to permit importing rice from Myanmar legally,” he said.
“Although they have not permitted rice imports, market demand is very big, so they seize illicit rice imports from Myanmar only sometimes,” he said.
As a result, experts believe that the price being offered by illicit traders in China would likely not begin to decrease until the end of the high trading season.
“The price [of rice exported to China] is not likely to go down until March as we are now exporting 3000 to 3500 tonnes of rice through Muse a day,” said U Thauk Kyar, an executive member of the Muse rice traders’ association.
The fiscal 2012-2013 total of 1.6 million tonnes was the highest in 46 years, thanks to the demand from China for exports via the newly booming Muse border post, which accounted for 60pc of the total 1.6 million tonnes exported last year, said U Lu Maw Myint Maung, adding that China has faced in increased demand for quality rice over the past year.
However, with Myanmar’s entry into the EU generalised system of preferences last year, Myanmar traders have started to export to Europe, said U Lu Maw Myint Maung.
“EU traders can import rice from Myanmar without paying import taxes if they can prove the country of origin,” he said.
Former joint secretary of the Myanmar Rice Federation and rice exporter U Myo Thura Aye said that 10 EU countries, including Spain, Portugal, Belgium and the Netherlands, are now buying rice from Myanmar.
“We’re exporting 5000 tonnes a month to Europe and 20,000 tonnes to Africa,” he said, adding that a smaller amount is going to the Philippines and Malaysia.
In addition, Myanmar Agribusiness Public Corporation (MACPO) announced last week that come May they will export up to 8000 tonnes of rice to Japan this year, said U Soe Tun, the company’s director.
“MAPCO is going to export … rice to Japan jointly with Japanese firm Mitsui & Co after it won a tender of Japanese government to import rice,” he said, adding that they would start importing 5pc broken rice at $470 per tonne.
By Zaw Htike
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