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.
Monday, 17 February 2014
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
Vietnamese rice faces barriers in biggest markets
Indonesian Minister for Economic Affairs Hatta Rajasa has requested the Ministries of Trade and Agriculture to take a probe against the illegal rice imports from Vietnam.
According to the Vietnam News Agency, the minister said there are some evidences about the importers’ license abuse.
The request has been made following the information that the illegal rice imports from Vietnam are being wholesaled in Cipinang or Baten province in eastern Jakarta on January 30, estimated at 16,900 tons.
The volume of rice was sold more cheaply than the domestic products. Sources said the rice has been imported to Indonesia with the legal license granted by the Indonesian Ministry of Trade.
Hatta Rajasa emphasized that the Indonesian government never allows individuals to import rice, and that it has authorized Bulog, an agency of the country, to import rice to stabilize the market prices. Therefore, it is highly possible that Vietnam’s rice has penetrated the Indonesian market through legal channels.
Prior to that, in October 2013, NFA, the Filipino food agency, warned that the contract on importing 120,000 tons of rice signed between the Filipino private import firms and the Southern Food Corporation (Vinafood 2) is invalid, and that the imports will be blocked by the country’s customs agencies.
According to NFA, under the country’s national quota program, Filipino businessmen can only buy rice from Thailand, India, China and Australia. The importers must obtain the special import licenses from NFA before they import rice from other countries.
Vietnam’s rice exports to the loyal markets of the Philippines, Indonesia and Malaysia have dropped dramatically recently, thus leading to the sharp fall of the total rice exports.
The rice exports to the Philippines dropped by 63 percent in the first nine months of 2013, while the exports to Malaysia dropped by 35 percent. Especially, Indonesia did not import rice from Vietnam.
In the context of the sharp falls in the exports to the loyal markets, the Vietnam’s rice production was “saved” by the strong rise in the exports to China. The export volume to the market in 2013 was four times higher than that in 2012, about 1.6 million tons.
China consumed 32 percent of Vietnam’s total rice exports, while African markets bought nearly 30 percent.
However, Vietnam has been warned against the reliance on China as the main export market. The unstable market would upset Vietnam’s rice export strategy one day if Vietnam does not follow a reasonable business development plan.
Nguyen Dinh Bich, a well-known rice expert, on his article on Thoi bao Kinh te Saigon--while noting that Vietnam had to lower the export prices sharply in 2013, which was a big bitterness, has warned that the same scenario may repeat in 2014.
The US Agriculture Department has predicted that the demand from the three Vietnamese loyal markets would soar in 2014 to 4 million tons, while the demand from eight Asian big rice importers would increase by 20.1 percent to 9.22 million tons. However, Bich commented that it would be not easy to boost exports to the markets.
According to the Vietnam News Agency, the minister said there are some evidences about the importers’ license abuse.
The request has been made following the information that the illegal rice imports from Vietnam are being wholesaled in Cipinang or Baten province in eastern Jakarta on January 30, estimated at 16,900 tons.
The volume of rice was sold more cheaply than the domestic products. Sources said the rice has been imported to Indonesia with the legal license granted by the Indonesian Ministry of Trade.
Hatta Rajasa emphasized that the Indonesian government never allows individuals to import rice, and that it has authorized Bulog, an agency of the country, to import rice to stabilize the market prices. Therefore, it is highly possible that Vietnam’s rice has penetrated the Indonesian market through legal channels.
Prior to that, in October 2013, NFA, the Filipino food agency, warned that the contract on importing 120,000 tons of rice signed between the Filipino private import firms and the Southern Food Corporation (Vinafood 2) is invalid, and that the imports will be blocked by the country’s customs agencies.
According to NFA, under the country’s national quota program, Filipino businessmen can only buy rice from Thailand, India, China and Australia. The importers must obtain the special import licenses from NFA before they import rice from other countries.
Vietnam’s rice exports to the loyal markets of the Philippines, Indonesia and Malaysia have dropped dramatically recently, thus leading to the sharp fall of the total rice exports.
The rice exports to the Philippines dropped by 63 percent in the first nine months of 2013, while the exports to Malaysia dropped by 35 percent. Especially, Indonesia did not import rice from Vietnam.
In the context of the sharp falls in the exports to the loyal markets, the Vietnam’s rice production was “saved” by the strong rise in the exports to China. The export volume to the market in 2013 was four times higher than that in 2012, about 1.6 million tons.
China consumed 32 percent of Vietnam’s total rice exports, while African markets bought nearly 30 percent.
However, Vietnam has been warned against the reliance on China as the main export market. The unstable market would upset Vietnam’s rice export strategy one day if Vietnam does not follow a reasonable business development plan.
Nguyen Dinh Bich, a well-known rice expert, on his article on Thoi bao Kinh te Saigon--while noting that Vietnam had to lower the export prices sharply in 2013, which was a big bitterness, has warned that the same scenario may repeat in 2014.
The US Agriculture Department has predicted that the demand from the three Vietnamese loyal markets would soar in 2014 to 4 million tons, while the demand from eight Asian big rice importers would increase by 20.1 percent to 9.22 million tons. However, Bich commented that it would be not easy to boost exports to the markets.
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