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.
Friday, 7 March 2014
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.
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