Thailand develops premium rice to compete vs Vietnam

Thailand, the world's top rice exporter, must expand its shares of the

market for premium-grade grain because it is losing out to Vietnam in a
Southeast Asian price war for lower-quality white rice, a senior
official said.

Thailand aimed to produce an extra 160,000 tons of premium-grade white
rice in the current 2010-11 crop, expanding planted area by around
64,000 hectares, said Prasert Gosalvitra, director-general of the rice
department in the Agriculture Ministry.

"The 160,000 tons is a conservative figure as we will not only increase
plantations but also increase our yield as well," Mr. Prasert told
Reuters on Monday.

Thailand currently produces around seven million tons of premium
fragrant rice out of total annual production of 30 million-32 million
tons. Premium-grade fragrant rice was quoted at $900 per ton this week.

Simple white rice grades were quoted at around $435-$465 per ton,
traders said. That is down by about a quarter this year and well under
half the record high of $1,080 per ton set in April 2008.

Thailand's fragrant rice is popular, but output is limited as it can be
grown only once a year.

The 10-member Association of Southeast Asian Nations (ASEAN) implemented
a free trade deal on rice this year.

This has cut import tariffs on rice to zero, and Vietnam has seized the
opportunity to export more grain to member countries due to its
competitive prices.

The Philippines, the world's biggest rice importer, has been a big
customer. It has ordered a record 2.45 million tons of rice for this
year, of which more then 90% will come from Vietnam.

Vietnamese 5% broken grade white rice was at $360 per ton this week,
well below the same grade of Thai rice at $435 per ton, exporters said.
"We can't compete with Vietnam on white rice any more. We need to go
upmarket, where I think we can do well as Vietnam can't produce
premium-grade rice," said Chookiat Ophaswongse of the Thai Rice
Exporters Association.

India to ease rice export ban

India is planning to bring some changes in the rice export ban as the overflowing warehouses with the staple food grains compels the country to ship premium non basmati rice. The government of India is expected to allow the private parties to export around 150000 metric tons of non basmati premium rice to the Middle East, said a Food Ministry official. The state godowns are filled with buffer stock food grains and no place for the accommodation of newly harvested grains. India, the world's second-largest rice producer after China, banned rice exports in 2007 to increase local supplies and curb prices. Federal warehouses currently have 26.2 million tons of rice stocks, nearly triple the requirement. The variety that the government is expected to allow for export by private parties is Red Matta, which is grown in the Southern State of Kerala. The demand for Red Matta is seen higher from the United Arab Emirates, Kuwait and Qatar due to Keralites, who settled in there, the official added. Exports of common rice varieties from India may further depress international rice prices that hit a 14-month low of $11.51 per hundredweight in the second week of May on the Chicago Board of Trade.

Sri Lanka to increase rice fields

Sri Lanka is likely to have a surplus of rice as paddy fields neglected owing to war in the north and east return to full production, government and private sector officials said. Eastern province governor Mohan Wijewickrema said previously neglected paddy fields in the region, which has about a quarter of the island's paddy land, are now under cultivation. About 83,000 acres of land in the east, abandoned for 20 years or more because of the ethnic war, is now back in production, while many irrigation tanks have been repaired. Free seeds had been given to farmers along with other support to displaced farmers to prepare land, Wijewickrema said. Paddy lands in the north are also being cultivated following the end of the ethnic conflict last May, which has resulted in an economic revival in the north-east region as well as the rest of the country. "With the expected production in the north I'm sure we can have a surplus," Wijewickrema said. Wijewickrema was speaking at the Ceylon Chamber of Commerce to announce the launch of an agricultural trade exhibition, 'Ag-Biz East', aimed at linking the region's farmer with business. The July 16-17 event to be held in the eastern port town of Trincomalee is organized by the National Agribusiness Council and the United States Agency for International Development with provincial government support. Unless there is a shift in food consumption patterns, ways to manage the excess production would have to be found, Wijewickrema said. "Our agricultural strategy in the long-run will be shifting from subsistence agriculture to commercially-oriented agriculture," he said. "High-value crops must replace traditionally low-value crops. It may be necessary to diversify rice cultivation within the national policy." Anura Ekanayake, chairman of the Ceylon Chamber of Commerce, said the end of the war offers opportunities to exploit the north-east region's resources with modern technology. "There has been a sharp increase in agricultural production, not only rice but also vegetables and other crops," he said. "So much so, concern has been expressed that we might face a glut, not perhaps this year, but most certainly the next year."

Uruguay’s rice harvest reached 1.15 million tons; good prospects for next crop

Uruguay’s 2010 harvest of clean, dry rice reached 1.15 million tons with an average yield per hectare of 7.094 kilos. Total area planted was 161.900 hectares according to Uruguay’s Ministry of Agriculture Statistics Office. Crop and yields are below those of the last four years which averaged 8.000 kilos per hectare. Late and abundant rainfall last November delayed 18% of the area to be planted until December which caused problems during seeding time, says the report based on a poll taken between April 20 and 30. An estimated 94.000 hectares (almost 58% of the rice area) won’t be planted for the next crop because of crop rotation. The land will be left for pasture to feed livestock. Regarding next year’s harvest all farmers interviewed said they would repeat rice although a few had yet to decide what area. However assuming similar planting intentions to this year the total area for the 2010/2011 crop could reach 198.000 hectares, the largest in the last twelve years (1998/1999). This has been boosted by a more regular rainfall than when the previous poll in April 2009.

In Vietnam rice threatened by sea water

In some places seawater has entered 50-70 km into the mainland. About 40 percent of rice growing areas has been affected by saltwater while one third of the rural population in the delta don’t have sufficient freshwater for daily activities. Many canals have dried up in An Giang and Dong Thap provinces because of prolonged dry and hot season, forcing locals to use unsafe water from contaminated canals or stagnant pools. Ben Tre Province is affected the most by the phenomena. Saltwater encroachment there is more severe than that elsewhere in the region. At the same time, Bac Lieu Province suffers great damage from the shortage of seawater for shrimp production, causing heavy losses for local shrimp breeders. “We are trying to meet both the demand for freshwater of rice growers and the needs of seawater of shrimp breeders, but it is very hard for us to keep a harmony between the two demands at the same time,” said a local official. Saving rice production without damaging shrimp breeding is the challenge at hand for Bac Lieu authorities.

Vietnam offers second cheapest price for rice

Vietnam Food Association (VFA) on Thursday said Vietnam offers second cheapest prices in global rice market after Myanmar. In a statement issued here, VFA said the country now has advantages in developing and exporting white rice but it has not yet become a competitor against Thailand in field of fragrant rice export. Rice trade in the international market is increasing after Philippines announced its demand to import over two million tonnes of rice and Indonesia could cancel the plan of exporting two million tonnes of rice because of prolonged droughts. This is also the reason that's why brokers and intermediaries are offering Vietnam's rice at $320-350 per tonne of Vietnam processed 3 percent-broken rice. However analysts said Vietnam's rice export price has inched up recently. export surpassed $1 billion till the end of second week in May. In the first 14 days of May, the country has exported 304,994 tonnes of rice valued at $135.7 million, raising the accumulative rice export volume to 2.3 million tonnes worth $1.06 billion. In comparison to the same period of last year, the rice export volume was 300,000 tonnes lower; however, the export turnover was similar, proving that the rice export price this year stayed at higher level than that of last year. At present, the farmers in Mekong Delta provinces have finished harvesting their spring-summer crop. The rice price to produce 5 percent broken rice stayed at 5,500-5,600 dong per kilogramme and the 5 percent-broken rice finished products were offered at about 6,500-6,600 dong per kilogramme.

India to export rice to Bangladesh

India has again relaxed its ban on export of food grains to facilitate supply exclusively to Bangladesh. The Indian commerce ministry partially lifted the two-year-old prohibition on overseas shipment of rice to allow export of altogether 100,000 tonnes of the grain to Bangladesh. India's decision to allow rice export to Bangladesh came just a few days after New Delhi relaxed the ban on export of wheat to facilitate supply of 400,000 tonnes. India's foreign trade DG, R S Gujral, stated that three Indian Public Sector Undertakings – Minerals and Metal Trading Corporation Limited (MMTCL), State Trading Corporation Limited (STCL) and Project, Equipment and Commodity Limited (PECL) – would export 100,000 tonnes of non-basmati rice (parboiled) to Bangladesh. While STCL will export 50000 tonnes, the MMTCL and PECL will supply 25000 tonnes each. Gujral said that export would be undertaken directly and only by the designated Public Sector Undertakings (PSUs). He also stated that (Bangladesh) would be advised to enter into contract only with the designated Indian PSUs "in terms of GATT provisions". The PSUs would buy rice from the market from all over India at a price as close to the Minimum Support Price (MSP) as possible, so as not to disturb the existing price situation in the market. The MSP for the common grade paddy has been fixed at Indian Rs 10 per kg, and at Indian Rs 10.3 for the Grade A variety for (October-September) 2009-2010. India had banned basmati rice export in April 2008, but relaxed the prohibition on a few occasions earlier to facilitate supply to neighbouring countries and also to African countries. According to the latest data, India's rice procurement was estimated to be 27.66 million tonnes for 2009-10 marketing year, down by about 0.3 per cent over the previous year. The food corporation of India expects that government rice procurement would touch the 30 million tonne mark in 2009-10.

Pakistan rice exports to reach record level

Pakistan, the world’s fifth biggest rice exporter, may ship a record 4.1 million metric tonnes by the end of next month, as much as 37 percent more than last year, according to the Rice Exporters Association of Pakistan. “We have exported 3.5 million tonnes of rice and are hoping to export another 500,000 to 600,000 tonnes by the end of June,” Chairman Malik Jahangir told bloomberg.com in a telephonic interview from Lahore. The country will earn $2.25 billion from the exports compared with $2.02 billion in the 12 months to June 2009, Jahangir said. Pakistan is looking forward to increasing exports to help expand its economy. The increased shipments may exacerbate a drop in global prices and boost competition with Vietnam and Thailand - the world’s two biggest exporters. “Vietnam threw their non-basmati rice in the market, so we had to lower our prices as well,” said Rafique Sulaiman, vice chairman of the association. Rice futures declined 0.2 percent to $11.60 per 100 pounds on the Chicago Board of Trade on Wednesday, and are 22 percent lower over the past year. Thailand’s 100 percent grade B white rice, a benchmark for Asia, was last set at $481 a tonne on April 28 compared with $571 about a year ago. Pakistan set a target for rice output at 6.4 million tonnes this year, compared with 6.9 million tonnes last year, according to Federal Agriculture Minister Nazar Muhammed Gondal in October. The grain is Pakistan’s second biggest export after textiles.

Asia rice prices barely changed, but set to fall soon

Asian rice prices changed only slightly this week as fresh demand from the Middle East and the Philippines helped support Vietnamese prices, traders said. But rice prices in Thailand, the world’s biggest exporter of the grain, were unchanged and likely to fall over the next few weeks as traders braced for the government to release its stocks. In Vietnam, the second biggest rice exporter, prices edged up this week on loading demand for Iraq and the Philippines after a major harvest had ended, Vietnamese traders said. The Vietnamese 5 percent broken grade white rice rose to $360-$365 a ton, free on board basis, from $350-$365 in late April. The 25-percent broken rice also increased to $330 a ton from $325-$330 a ton. "The harvest has ended and farmers raise their paddy prices when they see ships are coming to load rice," another trader said. He did not give an exact shipment volume this week but said at least 50,000 tons were now being loaded at Saigon Port. At Saigon Port, Vietnam’s largest port, several ships were loading rice for Iraq and also to fill small orders from private companies in the Philippines. Manila has allowed private firms to import 200,000 tons of rice until mid-September. So far this year Vietnam has exported more than 2.2 million tons of rice, of which 72 percent has gone to Asian countries, followed by 14.6 percent to Africa and 9.6 percent to the Middle East, the Vietnam Food Association said. In Thailand rice prices were quoted mostly unchanged on the back of government intervention, which helped prop up prices. But prices lacked momentum on thin demand as cheaper prices lured most buyers to shift to purchases from Vietnam, exporters said. The price of benchmark 100 B grade Thai white rice was quoted unchanged at $465 per ton. "Prices are now supported by limited supply as most of the rice is bought and kept in the government stocks," a Thai exporter said. Thai rice prices were expected to fall over the next few weeks and were likely to drag down Asian rice prices in general on concerns over rising supply as rumours spread that the Thai government would release its rice stocks soon, traders said. "Buyers expected the Thai government to release stocks after they settle the chaos there, so prices may drop," one trader said, without giving any timeframe for the lower price. The Thai government has declared a week-long holiday this week as it tackles escalating anti-government protests in the capital, Bangkok that have killed 39 people and wounded more than 300. The cabinet agreed on Tuesday a framework to sell some of the 6 million tons of rice stocks on the market, urging the commerce minister to sell them at an "appropriate" time and in quantities of no more than 300,000 tons each. But it gave no further details on when the rice stocks should be sold.

India Govt permits export of one lakh tonnes of rice to Bangladesh

The government today permitted the export of one lakh tonnes of non-basmati rice to Bangladesh on diplomatic grounds, even though there has been a ban on shipments since 2008. The export will be undertaken by state-owned trading firms -- STC, MMTC and PEC-- who have been asked to source the grain from the open market at a rate close to the minimum support price (MSP). Although there has been a ban on the export of non-basmati rice since April 2008, the government had permitted rice to be shipped to neighbouring countries and the African continent on several occasions in the past. In a notification, the Directorate General of Foreign Trade (DGFT) said that the prohibition should not be applied in this particular case. "Export (of the non-basmati rice) will be undertaken directly, and only by the designated PSUs (STC, MMTC and PEC)," the DGFT said. "PSUs will buy rice from markets across the country...at a price as close to the MSP as possible, so as not to disturb the existing price situation in the market," it added. The MSP for the common grade of paddy has been fixed at Rs 1,000 per quintal, and at Rs 1,030 per quintal for the Grade A variety for marketing year (October-September) 2009-10. While STC would export 50,000 tonnes of rice, MMTC and PEC have been assigned 25,000 tonnes each. On May 17, rice procurement was estimated at 27.66 million tonnes for the 2009-10 marketing year, down by about 3 per cent over the previous year. FCI expects rice procurement by the government in marketing year 2009-10 to touch the 30 million-tonne mark. Last week, the government had permitted the export of four lakh tonnes of wheat to Bangladesh from the Central pool, at about Rs 15.43 a kg.