Nov 16, 2009

Higher global demand, Indian shortage to boost rice prices

Rice farmers and the government will soon enjoy better prices due to higher global demand and a shortage in India.

The Commerce Ministry yesterday released the new reference prices for rice for November 16-30 trading. They are considerably higher than for the first half of the month because of increased demand.

The reference price for paddy white rice is set at Bt8,914 a tonne, against Bt8,389 in the previous round.

"The government will have to pay for a lower gap between the guaranteed price and the reference price, as market prices are rising," said the ministry's permanent secretary, Yanyong Phuangrach.

Under the government's guaranteed-income project, when farmers receive less than the guaranteed price from selling their crops, it will pay the difference between the guaranteed and reference prices.

With the guaranteed price for paddy white rice at Bt10,000, the government will have to pay only Bt1,086 per tonne to farmers under the new reference price.

The reference price for paddy Pathum Thani rice is Bt10,501 a tonne. The government will not however have to make up any shortfall, as this is higher than the guaranteed price of Bt10,000.

However, the reference price for jasmine rice has been lowered from Bt14,840 to Bt13,002 a tonne for the second half of this month, due to higher supply during the current main harvest season.

The guaranteed price for jasmine rice is Bt15,300, meaning the government will have to pay Bt2,298 a tonne to farmers.

However, the price of jasmine rice is likely to increase considerably following higher global demand, said Yanyong.

India has turned from a world supplier to a buyer of rice in order to maintain stocks of about 10 million tonnes. It will announce bidding for more batches in the near future to compensate for the loss of 10 million tonnes due to drought this year.

Usually, India keeps 30 million tonnes of rice in storage to ensure food security.

The natural disasters that have hit many rice-exporting countries have directly damaged their production, while world consumption of the staple is increasing.

Japan and the Philippines have staged rice auctions and China plans to import more rice soon.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said the price of jasmine rice had fallen due to supply increasing during the current harvest season by 15-20 per cent from last year.

High jasmine-rice prices over the past two years persuaded farmers to grow more of the commodity.
Production of paddy jasmine rice is expected to reach 6.5 million-7 million tonnes this year.

Chookiat added that the higher price for paddy white rice was also due to the Philippines opening an auction for 600,000 tonnes of imports next month.

Source: The Nation

Nov 6, 2009

Paddy prices may go up

Local paddy prices are on the rise after the Commerce Ministry kicked off the income guarantee project on Monday. Permanent secretary Yanyong Phuangrach said yesterday that paddy prices have increased by Bt600-Bt700 per tonne. However, the ministry has ordered officials to closely monitor how millers participating in the programme are measuring the moisture content of rice.

"We have to protect farmers from rice millers' tricks to allow them to receive a fair price," he said.

All paddy rice prices were increased yesterday by an average of Bt600-Bt700 per tonne. Jasmine rice is now trading at Bt13,000-Bt15,000, 5-per-cent rice at Bt8,500-Bt9,000, Pathumthani rice at Bt8,900-Bt9,000, sticky rice at Bt7,200-Bt7,400 and long-grain sticky rice at Bt8,900-Bt9,000.

Source : The Nation

Nov 6, 2009

Jazzman not grown from Hom Mali

DNA test of the new US fragrant rice strain known as Jazzmen shows it is developed from a Chinese strain and is inferior to Thai Hom Mali fragrant rice when cooked, Agriculture and Cooperatives Minister Theera Wongsamut says.

Mr Theera, who revealed the findings yesterday, said two separate tests had been carried out to investigate whether the developers of Jazzmen rice at Louisinana State University had violated a patent for Hom Mali and to compare the qualities of the two.

The DNA test, conducted at a laboratory of the state rice research centre in Ubon Ratchathani, found Jazzmen was a product of the genetic engineering of a Chinese strain.

When Jazzmen rice was cooked, Mr Theera said, it was less fragrant than Hom Mali.

"I believe customers who eat Thai rice still love the taste of Hom Mali," the minister said.

The unique aroma of Hom Mali comes from its sweet smell similar to that of the pandanus leaf, locally called bai toey, which is a quality hard to imitate, Rice Department chief Prasert Kosanwit said.

Authorities are afraid the new US high-yield strain, expected to hit the market next year, will affect exports of Hom Mali rice while scientists are especially concerned about possible violation of patented Hom Mali, whose genes that cause its aroma have been already identified by the National Science and Technology Development Agency.

Mr Prasert said rice exporters should ensure their Hom Mali rice met acceptable standards. They should not mix it with low quality rice to increase their profits as many countries are developing rice strains to compete with Thailand.

The brand Thai Hom Mali has been recently patented to avoid consumer confusion between Jazzmen and "Jasmine Rice", the English name of the Thai variety, Mr Prasert said.

Source: Bangkok Post

Nov 6, 2009

India likely to import rice from Vietnam

Sourced from the Reuters, India may import about 2 million tonnes of rice, including government-to-government deals with Thailand and Vietnam.

It is said that a ministerial panel, headed by Finance Minister Pranab Mukherjee, would make a decision on various proposals for rice imports on November 12. The worst monsoon in 37 years has shrunk the summer-sown rice output, resulting in raising prospects of higher food prices and further dependence on imports for the main food crop.

Source: Agroviet

Nov 3, 2009

Paddy price set to rise on intervention

Domestic paddy and rice prices are expected to rise after the government kicked off its paddy-buying programme to prop up prices during the current harvest. But rice traders said rice prices would be mainly determined by demand from the Philippines and India as their production has been hit by adverse weather.

The government yesterday launched its paddy-buying programme, which covers about 2 million tonnes of paddy for the 2009-10 main harvest, from November to March. Thailand is expected to produce about 23.5 million tonnes of paddy from the main crop.

The programme gets 20 billion baht from the Thai Khem Kaeng stimulus programme and runs until next February.

The government had planned to end its direct intervention in the rice market, but opted for a scheme that subsidises farmers without buying grain. It is now running both schemes in parallel due to protests from farmers.

The ministry would initially start buying paddy for the 2009-10 main crop in Phitsanulok, Kamphaeng Phet and Nonthaburi.

Rates would be based on the government's reference prices set at 8,389 baht per tonne for paddy with 15% moisture.

After heavy rain, local prices have fallen to between 6,000 and 6,500 baht for paddy with moisture exceeding 30%.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association said the free-on-board price of benchmark Thai white rice 100% Grade B is expected to rise to US$600 per tonne in the first quarter next year, up from $530 now.

According to Mr Chookiat, drought-hit India will be a net importer for the first time in 21 years next year, while the typhoon-ravaged Philippines is expected to import as much as 2.5 million tonnes next year, up from about 2 million tonnes.

India may import as much as 1 million tonnes next year after its wet season harvest plunged.

The weak monsoon caused India's production to drop which may see stockpiles plunge by one-third to 20 million tonnes in the year ending September 2010, the lowest level in five years.

"This is a good opportunity for the government to sell its stocks," said Mr Chookiat. The government plans to sell 950,000 tonnes of rice from its stocks through government-to-government deals in the remaining two months of the year and will release another 1.77 million tonnes in 2010.

The government is estimated to have the equivalent of 6 million tonnes of milled rice in its stores, bought from farmers under previous price-intervention schemes.

Source: Bangkok Post

October 29, 2009

India Abolishes Rice Import Tax

The government of India has scrapped its rice import duty as the government took emergency measures to increase food stocks after the worst drought in more than 30 years cut agricultural output.

India is the world’s second-largest producer and consumer of rice after China and has seldom made big purchases of rice on international markets. This year, however, it has been forced to turn to greater imports after one of the worst monsoons since 1972 and flooding damaged the domestic crop in northern India.

The US Department of Agriculture this week forecast a 15 million to 17 million MT decline in India's rice output for 2009-10 from a record 2008-09 production of 99.2 million MT. India is expected to consume about 90 million MT this year.

Source: www.oryza.com

Oct 21, 2009

Rice exports to Nigeria plunge

The bail-out of Nigerian banks has hit Thai rice exports in the past month, as some rice importers in that country have suspended ordering rice from the Kingdom.

Nigeria is Thailand's largest rice-export market, particularly for parboiled rice. Exports to this market account for 11.5 per cent of Thailand's rice exports.

Rice exports to Nigeria dropped 12.09 per cent to US$379.9 million (Bt12.68 billion) in the first eight months of the year.

Thai Rice Exporters Association president Chookiat Ophaswongse said local rice exports to Nigeria had plunged in the past month.

"Nigerian importers have delayed Thai-rice imports, because they're facing financial difficulties. The Nigerian government is now inspecting all banks in that country to determine whether credit was approved for traders intending to evade high import tariffs," said Chookiat.

However, Chookiat believes the problem will soon be solved.

Rice imports to Nigeria are subject to a 40-per-cent tariff. The country normally imports 250,000-300,000 tonnes of Thai rice a month.

Recently, it was reported that shares in five Nigerian banks bailed out by the government last week had been suspended.

The five banks are Afribank, Intercontinental Bank, Finbank, Oceanic Bank and Union Bank, which received a combined injection of 400 billion naira (Bt88.92 billion).

The value of shares in the banks tumbled after the bail-out and the sacking of the banks' bosses, prompting a halt in trading.

Source: The Nation

Oct 19, 2009

Thailand seeking to increase exports to Philippines

The Thai Rice Exporters Association is in talks with the government of the Philippines about the possibility of increasing the export of Thai rice to the Philippines.

President of the Thai Rice Exporters Association Chookiat Ophaswongse, said the association is currently talking with the government of the Philippines about an agreement to export 500,000 MT of Thai rice.

Chookiat revealed that the prospect of rice export during the next year looks promising for Thailand, as India cannot export rice due to increased domestic consumption. However, the price of Thai rice is expected to decrease to 500-520 US $, PMT as a new lot of rice enters the market.

Source : Oryza.com

October 13, 2009

Manila offers 50,000-tonne duty-free quota

The Philippines, which will not be implementing a zero import tariff on rice next year under the region's free-trade agreement, Afta, has offered Thailand an import quota of 50,000 tonnes at the zero rate as compensation.

Manila's delay in implanting the zero tariff will cause difficulties for Thai rice exporters to the Philippines, which imposes a high import duty of 40 per cent.

Commerce Minister Porntiva Nakasai said the ministry had been informed by the Thai Trade Representative Office in Manila of the delay in implementing the zero rice tariff.

"Thailand has asked the Manila government to compensate by allocating 400,000 tonnes for Thai rice imports at the zero tariff. However, it has only allocated a small quota of 50,000 tonnes for Thai rice [at a zero rate] each year," Porntiva said.

She said the government had not yet accepted the Philippine government's proposal as it wants to consider what course of action would be most beneficial for rice exporters.

The Philippines is one of the world's largest rice importers with demand of about 2 million tonnes a year. However, the high import duties and strong competition from Vietnam, whose traders offer a cheaper selling price, have made exporting to the country difficult for Thais.

Under Afta, import duties on rice among members - except Malaysia, the Philippines and Indonesia - will be eliminated by

January 1. Rice is now subject to a 5-per-ent import duty. Thailand and other Asean members agreed in 1992 to liberalise trade in agricultural products, including rice.

The Philippines has categorised rice as a highly sensitive good, and committed to reduce its import duty from 40 per cent to 35 per cent by 2015. Malaysia will reduce its import tariff to 20 per cent next year, while Indonesia will cut its tariff to 25 per cent by 2015.

In addition, Thai exporters have urged the government to relax its regulations on releasing rice stockpiles under international bidding as a measure to reduce pressure on huge stockpiles.

Charoen Laothammatas, vice president of the Thai Rice Exporters Association, said the government should relax its conditions for participating in international bidding so that it can release more of its stockpile.

The Philippines will soon open bidding to import more rice, due to the impact of its heavy monsoon season. The Thai government has not given full authority to officials to participate in the bidding. This means they cannot make an immediate decision on whether to compete with other bidders, Charoen said.

Charoen said the Philippines had imported about 1.8 million tonnes of rice this year, mainly from Vietnam.

Although Thailand is the world's largest rice exporter, the complicated conditions under which Thai officials can participate in bidding has hurt exporters' competitiveness, he said.

Source: The Nation

October 7, 2009

LIBERALISATION OF RICE TRADE : Market opening under Afta in doubt

Thailand must soon consider whether to open up its rice market or put off eliminating tariffs under the Asean Free Trade Agreement early next year.

The Commerce Ministry will ask the National Rice Policy Committee to make a final decision soon about whether to commit to Afta's schedule for trade liberalisation in rice.

The ministry pointed out two major effects expected from liberalisation. First, a free flow of rice would cause quality-control problems, because different varieties of rice and rice seeds could enter the Kingdom.

Second, if Thailand withdrew from its zero-tariff commitment for rice, the country would lose its leadership role.

A source with a subcommittee of the National Rice Policy Committee yesterday said the committee, chaired by Prime Minister Abhisit Vejjajiva, must make a final decision about the commitment to Afta.

"A meeting has not yet been scheduled, but important agenda items will include not only making a decision on the matter, but also how to prevent a flood of low-quality rice from neighbouring countries from entering the Kingdom," the source said.

Under Afta, import duties on rice among members - except Malaysia - will be eliminated by next January 1. Rice is now subject to a 5-per-cent import tax. Thailand and other Asean members agreed in 1992 to liberalise agricultural products, including rice, but the rice industry awoke to the liberalisation only this year.

Thai Rice Exporters Association president Chookiat Ophaswongse said Thailand must commit to liberalisation of its rice trade with Asean.

"If the government breaks the agreement, it will damage the country's image. Instead, the government should find ways of protecting the rice-farming and -trading system," he said.

Chookiat complained the government was very slow to tackle this problem, as rice exporters first learned of the impending market liberalisation early this year.

He also expressed concern that imported rice might be mixed with genetically modified strains, due to a shortage of officials at the borders.

To prevent a flood of imported rice, the subcommittee will propose the government allow importation of only broken rice, which has the backing of rice-manufacturing industries.

Acting Commerce Ministry permanent secretary Yanyong Phuangrach said the government would propose the committee set up a rice farmers' fund designed to increase efficiency in growing.

In addition, the ministry will also accelerate the release of its huge stockpile via more government-to-government contracts.

A Commerce Ministry source said the government would approach the Philippine government about taking 100,000 tonnes of white rice. It also plans to export to Russia.

Source: The Nation