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S. Korea may face rice oversupply in 2014 More rice exports expected for Thailand as pledging scheme Ends Exporters call for creation of Rice Board Price ‘rice’ before Ramadan: Blame it on hoarders NACC to probe into assets of ministers linked to rice-pledging scheme Bulk buyers reluctant to buy rice" Vietnam’s future as rice supplier to China still bright: experts East African Countries Hike Rice Import Duty To 35% Junta urged to replace rice scheme Yingluck, 4 others face assets probe Rice policy to save Nigeria $2.5b, says Adesina CoolClownFish’s Blog – Iraq Buys 120,000 Tons of Rice Experts divided over plummeting rice prices Thailand set to retain No.1 exporter spot
News Detail… S. Korea may face rice oversupply in 2014 03.06.2014
South Korea may face a possible oversupply of rice this year due to an increase in imports and its own production amid a steady decline in the country's overall rice consumption, the government said Tuesday, with the local rice market opening having yet to be decided.The Ministry of Agriculture, Food and Rural Affairs has said the country's self-sufficiency rate for rice is expected to reach 92 percent this year, breaching the 90percent mark for the first time in four years.However, the country's rice imports under a minimum market access (MMA) quota are also expected to grow to 409,000 tons, accounting for about 9 percent of South Korea's total estimated consumption. The country's rice import quota has been growing steadily since 1993 when the country was allowed to postpone opening its rice market under an agreement with the World Trade Organization (WTO).The agreement, extended by 10 years in 2004 in exchange for further increases in the MMA quota, expires at the end of this year.Ministry officials said the government has yet to make a final decision on whether to liberalize
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the country's rice market though many have noted the country may have no other option.The Philippines, the only other country in the world that has yet to liberalize its rice market, recently failed to negotiate another extension of its agreement with the WTO despite its offer to more than double its mandatory rice imports to over 800,000 tons.Kim Kyung-mee, head of the ministry's agricultural commerce division, has noted South Korea, Asia's fourth-largest economy, may be asked to give much more than what the Philippines had offered to win another delay of its market opening. Once increased, rice import quotas under the MMA remain fixed even after a country liberalizes its market, meaning South Korea already has to import over 400,000 tons of rice every year even if it decides to open its market immediately.Such a large amount in imports may force the country to cut back on its own harvest as the country's rice consumption is declining steadily.The country's overall rice consumption is expected to reach 4.58 million tons this year with its per capita consumption expected to shrink 1.75 percent on-year to 67.3 kilograms, according to the ministry."If the country decides to seek another waiver for its market opening, which will result in a large increase in its import quota, the country will have no choice but to significantly reduce its own rice production to avoid an oversupply," a ministry official said, while speaking on condition of anonymity.The ministry has said it will make its final decision on the rice market opening before the end of June. The first public hearing on the issue is scheduled for next week.
More rice exports expected for Thailand as pledging scheme Ends The Thai Rice Exporters Association said it expects the country to export 9 million tonnes of rice in 2014, 20 per cent more than the previously-estimated 7.5 million tonnes. BANGKOK: The Thai Rice Exporters Association on Wednesday raised the forecast for rice exports as the end of the state pledging scheme would help bring down prices.The association said it expects the country to export 9 million tonnes of rice in 2014. This is 20 per cent more than the previously-estimated 7.5 million tonnes.Rice exports fell in Thailand after the deposed government in October 2011 began buying rice from farmers at above market price, making export rates uncompetitive.India overtook Thailand as the world’s top rice exporter in 2012 as the scheme, which was meant to help poor farmers, caused a hike in export prices
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.The price of Thai 5-per cent broken rice reached US$650 per tonne in October 2011 while India was selling the grain overseas at far lower rates.The Thai grain is now selling at between US$380 and US$385, while Vietnamese rice costs US$400-US$405.Some 800,000 farmers were owed payment for months after the rice pledging scheme ran into financial trouble.The scheme ended in February this year.Thailand’s current military junta began paying money owed to the farmers after it seized power in a coup.
- Agencies/xq File photo: Thai farmers harvest rice in a field in Thailand's southern Narathiwat province. (AFP/MADAREE TOHLALA
Exporters call for creation of Rice Board PETCHANET PRATRUANGKRAI THE NATION June 5, 2014 1:00 am THE THAI RICE Exporters Association (TREA) yesterday proposed to the National Council for Peace and Order the setting up of an independent "Rice Board", comprising representatives from all involved to set up rice management policies and development plans for promoting sustainable growth of the industry.The proposal was made following expectations that the military government would not intervene in the market mechanism any longer, as it has created huge losses for the country as well as destroyed rice exporters' competitiveness. The association also believes that Thailand will reclaim its crown as the world's largest rice exporter this year with expected export volume of 9 million tonnes, higher than the previous projection in January of 7.5 million tonnes due to the lower price of Thai rice and lower export competition from India and Vietnam in the short run.Association president Charoen Laothamatas said that to increase efficiency of the rice industry management and ensure fair benefit to all involved, an independent Rice Board should be set up. The panel should be free from the impact of political changes so that the Thai rice industry could be developed without any intervention, despite changes in government.The panel should involve representatives from farmers, millers, local traders, exporters, academics, and representatives from government agencies. The panel should have full authority to draw up policies and increase the role of the market mechanism but should not
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intervene in the market system, he said.Charoen said that Thailand had learnt a valuable lesson from market intervention by setting a high pledging price. The government has faced huge losses from pledging and is left with enormous stockpiles, while the rice trading system has been destroyed. The government should no longer set up any subsidy project as it has destroyed both farmers and traders.He pointed out that without subsidy measures, the government could save at least Bt45 billion to Bt50 billion to help farmers with other long-term measures such as reducing the cost of production.To manage rice output in the upcoming harvest season second crop and the 2014-15 main crop harvest season, Charoen said the government could negotiate for selling rice in the futures market on export overseas so that farmers will have exact market and gain stable rice price.TREA honorary president Korbsook Iamsuri said that Thailand needs to have a clear roadmap to develop the rice industry from upstream to downstream with no political intervention. She said that the current National Rice Policy Committee has no efficiency to manipulate the rice industry, as it comprises only representatives from the government sides. The National Rice Policy Committee should be under the Rice Board as the board would not depend on politics and would focus only on industry development.The Rice Board could be set up under the Act so that in future politicians would not intervene in the rice industry as in the past, she added.Chookiat Ophaswongse, honorary president of the association, said that Thai rice exports this year would reach 9 million tonnes, worth about US$4.75 billion (Bt150 billion).Export volume has increased largely this year as the price of Thai rice has fallen gradually because the market is aware that the Thai government holds giant stockpiles and needs to release them continuously. The export value will not increase as much as the volume due to the low price of Thai rice. The average price per tonne of Thai rice is expected at $510 a tonne, compared with $620 a tonne last year, said Chookiat.However, the price of Thai rice has already bottomed out in recent months. The association foresees that the price of Thai rice is expected to increase slightly in the following months by about 10 per cent or $2030 a tonne. Vichai Sriprasert, another honorary president, said the pledging project had not only created huge losses to the country, but also destroyed farmers in the long run. The price of paddy rice in the local market has dropped sharply from Bt11,000 a tonne during pledging to only Bt7,000 a tonne now.
Price ‘rice’ before Ramadan: Blame it on hoarders JEDDAH: IRFAN MOHAMMED Published — Thursday 5 June 2014
The rice price has begun to soar in anticipation of Ramadan with a 45 percent increase for a 10 kg bag over the past few weeks.Traders cited upcoming Ramadan and short supplies of the essential commodity from rice exporting countries as reasons for the spike in prices.It is customary for the prices of rice to increase ahead of
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Ramadan but this year, there is a sharp rise, most of them said.The surge is coupled with a shortage of popular brands of basmati rice flying off supermarket shelves, according to customers. The kernel variety of basmati rice, popular among South Asian expatriates has almost vanished along with other long grain varieties that are in short supply.
Moreover, the prices of the precious grain have shot up by 40 percent and are expected to rise further in the coming weeks.This year is witnessing a shortage of kernel basmati from Pakistan and India, which has triggered the price hike, according to sources. However, the rice shortage is being manipulated by traders looking to make a lucrative profit by spiking the prices of all varieties of including those from Thailand and Vietnam. Even Egyptian rice price has peaked in the last two weeks.Sources told Arab News that many of the traders are hoarding stocks to trigger a price war during Ramadan.Although the surge in prices ahead of and during the holy month is a common grievance, this year the shortage is posing a serious problem with India, the largest rice exporting country, having reduced its exports to the Kingdom. A 10 kg bag of kernel basmati that was earlier priced at SR55 now costs SR80 but is scarce in the market. Several other long grain varieties are also witnessing a price hike with the sela, which was earlier sold at SR65, is now going at SR80. A 40 kg sela bag, which was SR210 a couple of weeks ago, is now SR290
NACC to probe into assets of ministers linked to rice-pledging scheme BANGKOK, 5 June 2014 (NNT) – The National Anti-Corruption Commission (NACC) is setting up a subcommittee to probe into the assets of former ministers under the Yingluck Shinawatra Administration involved in the rice-pledging scheme. The NACC said five former ministers under investigation included Ms. Yingluck Shinawatra, Mr. Niwatthamrong Boonsongpaisal, Mr. Boonsong Teriyapirom, Mr. Yanyong Puangrat, and Mr. Phum Sarapol. The sub-committee will inspect assets and liabilities of five ministers connected with the rice subsidy program where a large amount of rice reportedly went missing. Estimated losses from the previous five harvesting seasons under the scheme could also amount up to 500 billion baht. The NACC earlier indicated that Ms. Yingluck was guilty on dereliction of duty in the rice pledging fraud and voted to bring impeachment proceedings against her.
Bulk buyers reluctant to buy rice"
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The rice market continued to tumble on account of sluggish domestic demand and ample availability of stocks.Amit Chandna, proprietor of Hanuman Rice Trading Company, told Business Line that bulk buyers and retail traders are keeping themselves out of the market as they are reluctant to make fresh purchase. Market sentiments are weak following the continuous fall and only need-based buying is taking place, he said.Domestic demand has failed to pick up and prices may drop further in the coming days, said market experts. In the physical market, Pusa-1121 (steam) dropped ₹400 and was sold at ₹8,600 a quintal, while Pusa-1121 (sela) was quoted at ₹7,000 a quintal, down ₹500. Pure Basmati (raw) eased by ₹150 and was quoted at ₹12,000/quintal. Duplicate basmati (steam) was down ₹200 and was sold at ₹6,800/quintal. . Pusa-1121 (second wand) was sold at ₹6,700, Tibar at ₹5,800, and Dubar at ₹5,000/quintal. In the non-basmati section, Sharbati (steam) went down by ₹300 and was sold at ₹4,300, while Sharbati (sela) was quoted at ₹4,000/quintal, down ₹200. PR varieties dropped by ₹100-150, Permal (raw) was sold at Rs 2,100/quintal, Permal (sela) at ₹2,300, PR-11 (sela) at ₹2,400, and PR-11 (raw) at ₹2,500. PR14 (steam) sold was at ₹2,600. (This article was published on June 5, 2014)
Vietnam’s future as rice supplier to China still bright: experts VietNamNet Bridge – China, with its huge population of 1.4 billion, may lack food in the near future, which could give Vietnam an opportunity to gain superiority in rice trading with China. But recent tensions in the East Sea have raised concerns that Vietnamese rice sales are in danger. Vietnam’s agricultural production, which depends on China as a major rice buyer and material supplier, could also suffer if the partnership with China ended, but experts say there is no need to worry. China will need Vietnam more than Vietnam will need China.Prof Vo Tong Xuan, considered to be the most renowned rice expert in Vietnam, acknowledged that Vietnam imports many of its raw materials for agricultural production from China, and exports a large proportion of farm produce to China. However, problems can be resolved, he said. A recent report from the Ministry of Agriculture and Rural Development (MARD) showed that imports of fertilizers and pesticides from China accounted for 50 percent of import turnover in 2013, while 70 percent of hybrid-rice varieties were also from China.Xuan believes that Vietnam could import pesticides from Japan, Switzerland or Taiwan instead of
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China. In fact, the effectiveness of Chinese pesticides remains dubious, and Chinese pesticides are used mostly in the north.Regarding hybrid rice varieties, Xuan said Vietnamese farmers would not buy Chinese varieties if local authorities stopped subsidizing farmers. It is estimated that Chinese varieties would cost an additional VND40,000 per kilo, if the subsidy were cut.
What would happen if China stopped importing rice from Vietnam? The country has become the biggest consumer of Vietnam’s rice. It bought 41.75 percent of Vietnam’s total rice exports in the first five months of the year.Analysts say this scenario will not occur because China will still need Vietnam’s rice to feed its 1.4 billion consumers. In theory, China can buy Thai rice instead, but Thai rice is far more expensive than Vietnamese.Analysts have cited international reports as saying that China would lack at least 10 million tons of food by 2020.Agreeing with the analysts, Xuan said China has been depending on Vietnam as a rice supplier. ―They have been trying to step up food production, but the output is not enough for such a huge population,‖ he explained. ―China can only buy Thai rice in small quantities because Thai rice is expensive. Meanwhile, there are no other supply sources, if Laos and Cambodia also have to buy rice from Thailand,‖ he added.Therefore, Xuan believes that Vietnam should take the initiative in doing business with China by focusing on exporting products through official channels rather than across the border.Vietnamese exporters, however, still prefer across-the-border exports because of the simple procedures used. However, Xuan said it would be better for Vietnamese exporters to protect themselves with written rather than oral contracts.
East African Countries Hike Rice Import Duty To 35% June 4, 2014 Niyi Aderibigbe AgriBusiness, Business
VENTURES AFRICA –comprising Tanzania, Burundi, Rwanda, Uganda and Kenya has increased import duty on rice in a move to discourage cheap imports of the product from Asia and protect local farmers.Tanzania Finance Minister Saada Mkuya Salum said the import duty on rice was increased from 25 to 35 percent.―We did this after realising that is a sensitive product (rice) which can be produced locally. The whole process was consultative and involved stakeholders from all walks of life, different ministries and other government departments,‖ said Salum.There has been an outcry from rice farmers and millers in Tanzania over the influx of the cheap rice into the country from Asia, with calls for complete ban of importation of the staple food increasing in a bid to protect the local industry.There has been similar call from rice millers in fellow East African country, Uganda, with their representative, Ambassador Phillip Idro advising East African heads of state to ―revise the rice policy and ensure there is increased local production before allowing in some import‖.
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All Finance Ministers of the EAC were said to have signed the new proposal, except the Ugandan Minister, as Oryza quoted local sources as saying the East African country was proposing a 75 percent increase to its import duty and increase local production of rice.The economy of Tanzania, whose Finance Minister defended the move, depends heavily on agriculture, which accounts for more than 25 percent of Gross Domestic Product (GDP), provides 85 percent of exports, and employs 80 percent of the work force. Topography and climatic conditions, however, limit cultivated crops to only 4 percent of the land area.Cash crops including coffee, tea, cotton, sisal and pyrethrum account for the vast majority of export earnings.The volume of all major crops—both cash and goods, which have been marketed through official channels—have increased over the past few years, but large amounts of produce never reach the market.Poor pricing and unreliable cash flow to farmers continue to frustrate the Tanzanian agricultural sector.
Junta urged to replace rice scheme Better alternatives available, says former MP Published: 5 Jun 2014 at 15.40 | Online news: Writer: Online Reporters
Former Democrat MP for Phitsanulok Warong Detkitwikrom has called on the National Council for Peace and Order (NCPO) to put an end to the "corruption-plagued" rice-pledging scheme of the previous government. He said if the scheme continues to operate corruption would continue. But there are alternatives.Mr Warong proposed at a press conference that the state subsidise farmers' purchases of fertiliser, farm chemicals and other materials. He suggested the subsidy be 1,000-2,000 baht per rai (1,600 square metres) of paddy.He also asked the NCPO to revive the farmers' income insurance scheme run by the Democrat Party. He said it was internationally recognised. Japan had also implemented such a scheme. The NCPO could take quick action this way to help farmers who are in trouble. Mr Warong urged the junta leaders to set up a committee to investigate the disappearance of rice from government stocks. He suggested the committee comprise independent experts, not officials from the Ministry of Commerce.A government sub-committee handling the accounts of the rice-pledging scheme had reported that 500,000 tonnes of rice had gone missing from government stocks, he said.Keep up-to-date with the latest on coup d'etat with Bangkok Post SMS News. Call *451391000 to subscribe – 39 baht/month (7 days free, available in Thailand only) Bangkok Post SMS News: Deliver only trustworthy news on SMS
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Yingluck, 4 others face assets probe Published: 5 Jun 2014 at 21.47 Online news: Local News Writer: Online Reporters
Former prime minister Yingluck Shinawatra and four of her ex-ministers involved in the controversial rice-pledging scheme are to have their assets scrutinized by the National Anti-Corruption Commission. The scheme has been plagued with allegations of corruption - missing stockpiles, substandard produce and inferior grains mixed in with higher quality rice - to take advantage of the abnormally high pledging price offered by the Yingluck government. Complaints were also raised that lower standard rice from neighbouring countries was added to the government's burgeoning stockpiles. Agricultural and commerce experts suggest the amount of money lost in the scheme is as high as 700 billion baht.A woman checks a rice stockpile kept in a warehouse in Si Prachan district in Suphan Buri. The warehouse was inspected by then-caretaker deputy commerce minister Yanyong Puangraj on Feb 14. NACC deputy secretary-general Voravit Sukboon said a meeting of the agency on Thursday approved the investigation into the assets and liabilities of Ms Yingluck, former commerce ministers Niwattumrong Boonsongpaisan and Boonsong Teriyapirom, and former deputy commerce ministers Yanyong Phuangrach and Phum Sarapol. Narong Ratha-amarit, an NACC member, was appointed to head the scrutiny sub-committee which will investigate whether any of the five had accumulated unusual wealth from their handling of the ricepledging scheme. The subcommittee would coordinate with a subcommittee already investigating corruption in connection with the rice scheme, Mr Vorarit said.The former members of the Yingluck administration left their ministerial posts in two groups on May 7 and May 22. They are required by law to declare their assets and liabilities to the NACC by June 5 and June 20 respectively.The declared assets and liabilities were expected to be revealed to the public early next month, Mr Voravit said.The agency, meanwhile, had no legal authority to examine the assets and liabilities of members of the military junta’s National Council for Peace and Order, said Mr Voravit, because the law did not require them to declare their assets to the NACC, nor gave power to the agency to do so. He was responding to the calls widely posted online by anti-coup groups. The anti-graft agency has asked the NCPO to set up a committee and a sub-committee to carry out a nationwide rice stock inspection. NCPO secretary-general Gen Udomdej Seetabutr said he had instructed commanders of the four military regions to prepare manpower for the rice inspection once the committees are established. (Photo by Thiti Wannamontha)
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A woman checks a rice stockpile kept in a warehouse in Si Prachan district in Suphan Buri. The warehouse was inspected by then-caretaker deputy commerce minister Yanyong Puangraj on Feb 14. (Photo by Thitiwantamona).
Rice policy to save Nigeria $2.5b, says Adesina Posted by: Frank Ikpefan in Business 20 hours ago The Federal Government’s policy on rice import is designed to save the country $2.5 billion yearly, Minister of Agriculture and Rural Development, Akinwumi Adesina has said.The government placed a new policy on rice import to promote local rice production and attain self-sufficiency by next year.Adesina explained that high-quality Nigerian rice is in the market, adding that the country will be a net exporter of rice.―Today, Nigeria is feeding itself, since a nation that cannot feed itself is simply at the mercy of others subject to the volatility of global commodity markets. Soon, Nigerian rice will become global exhibition .―Our rice self-sufficiency policy was directed at saving Nigeria $2.5 billion annually and putting this into the hands of our rice farmers and rural communities,‖ Adesina was quoted to have said in a statement.The minister said the size of agriculture and agribusiness sector in Africa is expected to grow to $1 trillion by 2030.He also said Foreign Direct Investment (FDI) in agriculture in Africa will increase from $10 billion in 2015 to $45 billion by 2020.Adesina called on Nigerians to tap into the agriculture sector, adding that with over 84 million hectares of land, abundant water and cheap labour, the country is poised to become a major player in global food markets.
CoolClownFish’s Blog – Iraq Buys 120,000 Tons of Rice By iraqidinarnewstoday | June 5, 2014
Iraq has purchased 120,000 tons of rice from the United States, Uruguay and Vietnam, according to Business Recorder.At the closing of the Iraq State Grain Board tender, 30,000 tons of the rice had been acquired from the US, 30,000 tons had come from Vietnam and a further 60,000 tons came from Uruguay, which was the cheapest price offered at $717 a ton. Rice is grown in parts of southern Iraq (pictured) but the country is dependent on imports
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Experts divided over plummeting rice prices Published: 5 Jun 2014 at 06.04 Newspaper section: Business Writer: Phusadee Arunmas
Rice exporters and academics are still divided over ways to raise paddy prices, which have now tumbled to only 7,500 baht per tonne, half of the 15,000 baht offered by the Yingluck Shinawatra government in the controversial rice-pledging scheme. Nipon Puapongsakorn, a distinguished fellow at the Thailand Development Research Institute, said it is imperative the state stops selling rice stocks so that the National Council for Peace and Order (NCPO) can assess the exact amount of pledged rice, the amount exported, the amount withdrawn from state warehouses, the amount of good-quality or rotten rice, the amount that has disappeared and the total expenses incurred.After that, he urged the junta to embark on a nationwide rice stock inspection, with independent organisations and surveyors allowed to participate. "We have to admit to a lost opportunity to dispose of the rice stocks," Mr Nipon said. "But once the exact amount is available and clear, it will help disperse market speculation and raise rice prices."However, Charoen Laothammatas, president of the Thai Rice Exporters Association, disagreed with the proposal to stop disposing of state rice stocks, saying sales need to become flexible and dynamic."Rice sales are a matter of prudent management," he said. "We have to wait for a proper period for each type of rice. If we fetch the right prices, we should immediately step up rice sales."Mr Charoen said the association is preparing to propose measures about rice management to the NCPO if asked.However, he agreed with Mr Nipon that the junta should speed up inspecting rice stocks to check the exact amount and types of rice in stockpiles.Mr Charoen also called for an open rice auction and immediate measures to curb further falls in rice prices. It is estimated that as much as 15-16 million tonnes of rice are now kept in state rice stocks, with exporters expected to take 3-5 years to dispose of stocks.Mr Charoen also called for the setting up of a rice board to take care of the country's rice management system and ways to cut rice farmers' production costs.A rice board, he said, should include representatives from rice farmers, millers, rice packers and traders, exporters and state officials."The rice policy is normally used as a political tool and exploited by political parties," said Mr Charoen. "This sort of policy has from time to time distorted the rice market."In a related development, Chookiat Ophaswongse, honorary president of the association, said Thailand's rice shipments are expected to rise in the second half of the year on the back of cheaper prices. He also expected Thailand to overtake India to recover its position as the world's No.1 rice exporter at the end of this year.Thai rice prices are now quoted at US$390 per tonne, with Indian rice at $420-430 and Vietnamese grain around $400 per tonne.From Jan 1 to May 20, Thailand exported a total of 3.93 million tonnes, surpassing India (3.74 million tonnes) and Vietnam (2.4 million tonnes) in the same period.The association expects the country to export 9 million tonnes of rice in 2014, up from its earlier forecast of 7.5 million.Mr Charoen said market mechanisms are now allowed to work freely without any intervention programme.
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Thailand exported 6.6 million tonnes of rice in 2013, down from 6.9 million tonnes in 2012, when the country lost its crown as the world's biggest rice exporter to India.Exports slumped after the government of former prime minister Yingluck Shinawatra started buying rice from farmers at a price way above market levels from October 2011, making export prices less competitive.The Bank for Agriculture and Agricultural Cooperatives has urged the junta to introduce measures to prevent rice prices from falling further when 20 million tonnes of second-crop paddy flood the market in the coming months.
Thailand set to retain No.1 exporter spot SAMEER MOHINDRU Thailand’s rice exports are growing, but the Southeast Asian country is unlikely to get back its lost crown as the world’s No. 1 exporter any time soon, analysts say.A worker arranges rice grain on July 17 loaded to the back of a truck after a harvest in a paddy field in Nakhonsawan province, north of Bangkok.India’s rice exports are forecast at 9 million tons this year followed by Vietnam’s 7.4 million tons and Thailand’s 6.5 million tons, according to the London-based International Grains Council. The two countries jumped ahead of Thailand in rice exports last year.Outpacing Vietnam to second place is going to be a lot easier for Thailand than beating India any time soon, analysts say. Up against Vietnam, Thailand has several advantages, including the demand for its longer-grain rice by buyers Iraq and Republic of Benin in west Africa and a recent push by the Thai government to sell some of its stockpiled rice. But Thailand lost so much ground in its fall from No. 1 that it will find it very challenging to sell enough to pass India, despite that country’s own expected drop in exports, analysts say.So how does Thailand find itself playing catch-up in a game it once dominated? Two years ago, the Thai government wanted to boost the income of rice farmers, one of the ruling party’s key voting constituencies. So it bought rice at 50 percent prices above the market rates and shoveled it into storage sites, predicting that this would goose up market prices.But that isn’t what happened. India and Vietnam jumped in to pick up the business with cheaper prices. Thailand was left with excess supplies and debt from the costly subsidy program and storage costs.The Thai government has now scaled back the subsidy, meaning private companies will now have more rice to sell from the next crop to be harvested from October.―(The) government’s new limits on buying rice from growers will leave more [grain] in the market for exports,‖ said Prem Na Songkhla, a rice farmer from Pathumthani province.
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Thai rice exports have been on the rise, partly due to a mix of import rules in Iraq and import tariffs in Nigeria, two major importers. Thai exports are also up because the government has managed to sell some of its surplus rice at prices lower than its cost of purchase.―Anticipation of higher supply from government stocks has pulled down prices and narrowed the gap with offers from Vietnam and India,‖ said Chareon Laothamatas, managing director at Uthai Produce Ltd., one of Thailand’s largest exporters of premium-grade Jasmine rice.Thailand’s 5% broken grade of white rice is now offered around $425 per ton, loaded on ships, down 12% from six weeks earlier. Vietnam’s 5% broken rice is offered at $370 per ton down from $390 per ton six weeks ago.Thailand’s rice exports rose 35% in July compared with year earlier to 675,064 metric tons, hitting a nine-month high as lower prices revived demand, according to the Thai Rice Exporters Association.The London-based International Grains Council has forecast Thailand’s rice exports will rise 23% to 8 million tons for all of 2014. As Thailand makes a strong pitch to sell its surplus rice stock, it may surpass Vietnam to become world’s second-largest exporter in 2014, the grains council said in a report last month.But the boost isn’t likely to get Thailand back on top, a major rice exporter said.―It will be difficult to sustain the [export] gains made in July, month after month,‖ said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.Exporters are quick to point out that even after the increase in Thai rice exports recently, Thailand’s monthly shipments overseas are still 40% below the record 1.1 million tons made two years ago. Thailand, India and Pakistan, all leading rice exporters, start harvesting their main rice crop soon and will be competing for the same export destinations at a time when the demand is sluggish. Meanwhile, a mismatch is expected between buying and production: Global trade will rise by 500,000 tons next year while production is forecast to rise by 5.5 million tons. Meanwhile, inventories with the world’s five major exporters are at an alltime record, the London-based IGC said.India will retain its No. 1 position as rice exporter this year, the IGC predicts in its report.But even India is struggling to sustain the 10.4 million tons of exports it made last year, the IGC says. The council forecasts a 13% decline in India’s rice exports in 2013 due to smaller demand from African countries.Iraq and the Republic of Benin in west Africa are two major buyers that are driving up Thailand’s exports of rice, said Mr. Chookiat, who is also managing director of Huay Chuan Rice Export Corp.India and Vietnam are unable to meet the minimum grain length specifications of Iraq, ―giving us a trade advantage‖, Mr Chookiat said. Sales to Iraq in July are up 16% compared with year earlier, according to the association’s data.Traders say rice that eventually will be sold in Nigeria, the world’s largest importer, is being routed through neighboring Benin. Due to a hike in the import duty in Nigeria beginning on Jan. 1, many companies there are securing rice through informal land border trade between Nigeria and Benin, said Mr. Chookiat.Thailand exported 104,000 tons of rice to Benin in July, up from 40,000 tons in the same month last year, mostly of parboiled grades, which is rice that has been partially boiled before milling and export and that is immensely popular in Africa.India is Thailand’s main competitor in the parboiled rice market. Thailand has narrowed the price gap between its parboiled rice and that of India.For the near future, at least, Thailand should set its goal at shoving aside Vietnam, analysts conclude. Beating India, they add, will take patience, smart reaction to market openings and time.
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