Cambodia Rice News: World Rice News: Thailand Government Urged to Build 10 Million Ton Storage Space for New Rice

Thailand Government Urged to Build 10 Million Ton Storage Space for New Rice

Thailand’s Public Warehouse Organization (PWO) is urging the government to allow private companies to build additional storage space for at least 10 million tons to help the government run the rice mortgage program in future.

The executive VP of PWO revealed that it is expected that the government would have to store about 6.5 million tons of rice from the new harvesting season, while the PWO can store only 4.5 million tons.

The official suggested that about 10 private companies be allowed to construct storage space of about one million tons each. He said, "If 10 companies joined the plan and each has the capacity of one million tonnes, then we could hold up to 10 million tonnes and not be concerned about slow sales."

The PWO is considering allowing private traders to store rice under rent to the government and reducing the deposit from 100% of rice value to about 70% for private companies which join the rice mortgage program.

Thai rice exports have plunged over 45% this year after the mortgage scheme pushed rice prices higher by about $100 per ton than rivals Vietnam and India. Slow sales have resulted in record high stocks of about 11 million tons rice. Thailand's rice production in 2012-13 is estimated to reach 21.1 million tons, up 3% from 2011-12, and the government has said that the rice mortgage program will continue to 2013.

Source: Oryza/16August2012

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Cambodia Rice News: World Rice News: In Defense of Rice Scheme, Thai Officials Say Scheme Helps Other Rice Exporters

In Defense of Rice Scheme, Thai Officials Say Scheme Helps Other Rice Exporters

Thailand’s Permanent Secretary to the Commerce Ministry says representatives from the USDA plan to visit Thailand to inspect whether the rice mortgage scheme violates any World Trade Organization (WTO) rules on export subsidies, adding that such fears are unfounded.

The Commerce Ministry official said that the rice mortgage program boosts farmer income and does not lower rice prices, and thus does not give Thailand an advantage on international export markets. And, the money spent under the program cannot be called export subsidies as the money remains within the country, he added.

The official said, "No damage is incurred in the international market. The money spent on the rice pledging scheme circulates within the country…I wonder on what grounds the US is accusing us. I am ready to clarify.”

Rather than being harmed, the Commerce Secretary pointed out that the U.S. and other rice exporting countries benefit from the Thai scheme.

"A subsidy means dumping prices and hurting the competition of rivals but in this sense [Thailand's subsidy] is designed to support [farm] income and help boost domestic and export prices.” Adding “Other rice exporting nations such as the U.S. will also benefit from rising prices.”

He also noted that the subsidies of $5 billion per year that the U.S. pays its farmers and several other policies have distorted the rice market. The U.S. $158 million food aid program in Africa had hurt Thai rice exports, he alleged.

Meanwhile, the U.S. embassy has denied any U.S. plan to send USDA officials to Thailand to inspect the rice mortgage program, adding, "We have no formal position on the new Thai rice scheme, just as we have no formal position on the one before it," said embassy spokesman.

Source: Oryza/10August2012

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Cambodia Rice News: World Rice News: India, Vietnam rice exports to surpass Thailand in 2012

India, Vietnam rice exports to surpass Thailand in 2012

PHUKET: A Thai trade researcher has concurred with a recent prediction by the United States Department of Agriculture (USDA) that India and Vietnam will export more rice than Thailand this year.

Thanawan Phonwichai, the Director of the Business and Economics Forecasting Center at the Thai Chamber of Commerce University said that Thailand is expected to lose its crown as the world’s top rice exporter due to an increasingly competitive regional market.

"Consistent with the USDA’s prediction, India this year is producing a lot of rice at lower prices. This has caused Vietnam to lower its prices to be more competitive.

"At the same time Thailand has not lowered its prices due to its base costs being a lot higher. As a result, we expect that India will export 8 million tonnes this year, followed by Vietnam exporting about 7, and Thailand just 6.5 million tonnes," he said.

According to the USDA, the predicted figure will equate to a 39% annual decline in the Kingdom’s rice exports.

Mr Thanawan added that he expects Thailand to reclaim its top position in 2013, however, when his department predicts that Thailand will export 8mn tonnes, followed by Vietnam with 7mn tonnes and India at 6mn tonnes.

In a related article by The Nation, it was reported that Thailand only exported 4.7mn tonnes between October, last year and July, 2012, about half when compared to the same period a previous year, when nearly 9mn tonnes were exported.

Export value also declined from 160 billion baht in the previous year to about 100bn baht this year, according to the Thailand Development Research Institute (TDRI).

The TDRI attributed the fall mainly to the government’s rice-mortgage policy.

The rice-pledging policy had destroyed the competitiveness of Thai rice in the world market because the government’s mortgage prices were a lot higher, TDRI President Nipon Poapongsakorn said.

Mr Nipon pointed out that Thailand would suffer a loss of 87bn to 100bn baht immediately if the government decided to release 10.2 million tonnes of rice in its stocks, noting that the pledging price is high while the current market price is still low.

Thailand will end up losing US$75 to US$77 (2,364 to 2,427 baht) per ton if it sells at the current market price, and this would not include the cost of pledging – about 260bn baht.

"Thailand is losing huge amounts on subsidies that are helping, not just poor farmers but also landlords and rich farmers, because the government is accepting all the rice that is entered in the pledging scheme.

"More than 52% of the rice entered in the pledging scheme comes from rich farmers," Nipon explained.

He added that if the government changed its pledging measure to providing direct subsidies to a particular group of small farmers, then it would only spend about 30bn to 40bn baht a year.

According to TDRI, about 80% of Thai farmers are small, producing only about 10 tonnes of rice per harvest.

Source: PHUKET NEWS/7August2012

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Cambodia Rice News: World Rice News: Asian Rice Quotes Mixed

Asian Rice Quotes Mixed

Thai rice sellers lower their quotes for 5% broken rice by about $5 per ton to about $560 - $570 per ton and increased their quotes for Parboiled rice by about $5 per ton to about $560 - $570 per ton. Viet rice sellers increased their quotes for 5% broken rice by about $5 per ton to about $410 - $420 per ton. Indian rice sellers increased their quotes for 25% and 100% broken rice by about $5 and $10 per ton respectively. Pak rice sellers kept their quotes unchanged.

Thai 5% rice is quoted about $560 - $570per ton, down about $5 per ton from Wednesday and about a $150 per ton premium over Viet 5% rice shown around $410 - $420 per ton, up about $5 per ton from yesterday. Indian 5% rice is quoted around $415 - $425 per ton, about a $30 per ton discount to Pak 5% rice shown around $445 - $455 per ton.

Thai 25% rice is quoted about $545 - $555 per ton, about a $170 per ton premium over Viet 25% rice indicated around $375 - $385 per ton. Indian 25% rice is quoted about $380 - $390 per ton, up about $5 per ton from Wednesday and, about a $15 per ton discount to Pak 25% rice shown around $395 - $405 per ton.

Thai parboiled rice is quoted about $560 - $570 per ton, up about $5 per ton from yesterday. Indian parboiled rice is quoted around $400 - $410 per ton, about a $70 per ton discount to Pak parboiled rice shown around $470 - $480 per ton.

Thai broken rice, A1 Super, is quoted about $505 - $515 per ton, about a $155 per ton premium over Viet broken rice shown around $350 - $360 per ton. Indian broken sortexed is quoted about $345 - $355 per ton, up about $10 per ton from Wednesday, and about a $10 per ton premium to Pak broken sortexed rice indicated around $335- $345 per ton.

Source: Oryza/3August2012

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Cambodia Rice News: World Rice News: Vietnamese rice prices move higher on intervention, Thai prices slip

Vietnamese rice prices move higher on intervention, Thai prices slip

Vietnamese rice prices edged higher this week, despite a rise in supply, supported by a government stockpiling plan, while Thai rice prices slipped because of thin demand, traders said on Wednesday.

Vietnamese exporters started buying summer-autumn paddy this week under an industry stockpiling scheme, but the export market remained largely lifeless, traders said.

Traders said export prices could rise next month if new demand emerges from key buyers such as the Philippines and Indonesia, but so far Vietnam has failed to fend off competition from cheaper grain from Myanmar and India, where offer prices have ranged from $350 to $430 per tonne.

"Prices have started edging up in the past few days, which has also caused a slight change in export prices," said a trader in Ho Chi Minh City.

The 25 percent broken rice was quoted at $375-$380 per tonne, free on board Saigon Port, up from $370-$375 per tonne last week. The 5 percent broken grain was unchanged at $410-$415 per tonne.

Prices for a kilogram of summer-autumn paddy, used mostly for processing lower quality grades including 15 and 25 percent broken rice, gained 100-150 dong, or about 1 US cent, in the Mekong Delta area.

Vietnam's government has allowed rice exporters to use interest-free loans to buy 500,000 tonnes of milled rice, or 1 million tonnes of paddy, until August 10 and to keep the stock until October 10 to help boost domestic prices during the harvest peak this month.

However, traders said the purchase volume was quite small compared with the 8.9 million tonnes of paddy expected from the Delta's harvest.

Rice prices in Thailand slipped as local millers offered to sell at slightly lower prices to encourage exporters to start buying again.

Millers offered to sell at 17,400 baht ($550) per tonne for premium grade white rice, down from last week's 18,000 baht.

Some millers, who have rice but can no longer sell it on to the government because the government intervention scheme has expired for now, needed to offload at cheaper prices to improve their liquidity. As a result, export-grade 100 percent B grade Thai white rice eased to $590 per tonne, down from last week's $600 per tonne, exporters said.

"That didn't really help as exporters have no orders. So no one wants to buy at this point," said a Bangkok-based trader.

However, traders said Thai rice prices were unlikely to fall sharply over the next few weeks even though the government intervention scheme expired at the end of June as the scheme is almost certain to be renewed, probably from August.

"The government has drained all of the grain into its stocks and left nothing for us to sell. There is no trade in Thai rice. Prices are just pegged at high levels, with no trade," said Charoen Laothamatas at rice exporter Uthai Produce Co Ltd.

Last week the Thai government said it had sold 240,000 tonnes of rice from its stocks to Ivory Coast. However, traders noted that it represented only 3 percent of record high stocks of about 8 million tonnes of milled rice, so the deal had a limited impact on Thai prices.

Source: Brecorder/15July2012

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Cambodia Rice: World Rice News: Thailand will still be top rice exporter

Thailand will still be top rice exporter

Thailand would be able to maintain its position as the world’s largest rice exporter this year, permanent secretary for commerce Yanyong Puangraj said on Tuesday.

Thailand exported 2.6 million tonnes of rice, worth 53.67 billion baht, from Jan 1 to May 17 and became the world's largest exporter.

The US took second place, exporting two million tones of rice and Vietnam third place with its 1.6 million tonnes of rice exported during the same period, said Mr Yanyong.

The average rice export price increased by 20 per cent to US$669 per tonne, from US$566, showing that the world market still wanted Thai rice even with its price raised by the price pledging scheme, he added.

The permanent secretary expected rice exports would total at least nine million tonnes this year.

“Thailand will be able to maintain its world number one rice exporter status. In the past we focused on export quantity in keeping the championship post. But now we will also emphasise our rice’s quality standard and are looking at more premium markets,” Mr Yanyong said.

He said his ministry expected the world market price of Thai Hommali rice would increase by five per cent to US$1,200 a tonne and by 15 per cent to US$700 per tonne for white rice. This would allow the domestic price of paddy to stand at 15,000-20,000 baht per tonne.

Kobsuk Iamsuree, chairwoman of the Thai Rice Exporters Association, disagreed with the ministry’s rice exports projection for 2012. She said her association still predicted rice exports for the year at only 6.5 million tonnes.

If the government is to increase rice exports to nine million tonnes, as planned, it would have to get it done through a government-to-government selling agreement, said Ms Kobsuk.

The baht had now weakened to 31 baht to the US dollar, lowering the price of Hommali rice to US$1,080 a tonne, from US$1,100. If the rice price is to reach US$1,200 a tonne, the value of the Thai currency must be strengthened to 25-26 baht to the dollar, she said.

“Through goverenment-to-government negotiations, the state might get a better price, but it is certain that the price would not be that high if the deals are made between private firms,” said Ms Kobsuk.

Source: Bangkokpost/22May2012

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Cambodia Rice: Thai rice exporter invests in Cambodia

Thai rice exporter invests in Cambodia

Thailand's top rice exporter in 2011 invests in Cambodia: ready-to-eat-meals & processing for export in Cambodia rather than Vietnam.

STC Group, Thailand's biggest rice exporter, has become the latest company to explore rice investment opportunities in Cambodia.

Talks to form a venture with a Cambodian partner, which have started since last year, are likely to be finalised some time this year, an executive said.

"The venture will focus on rice processing, logistics and rice exports from Cambodia," said Wanlop Pichpongsa, deputy managing director of Capital Rice Co, STC Group's rice-exporting flagship.

STC is among several Thai investors seeking to enter the thriving rice industry of Cambodia, whose government has planned to export about one million tonnes over the next few years.

Among the prominent companies are Asia Golden Rice, a leading rice exporter which has announced to pour in 1.5 billion baht to process one million tonnes of rice a year in Cambodia's southern province of Kampot.

Actually, Cambodia's rice industry has strong potential thanks to its naturally rich soil. The country has a number of millers and processing plants but they are not enough

Most paddy is sold to be processed in Vietnam for exports and Mr Wanlop said the joint investment could help Cambodia earn more than exporting the rice in commodity form.

STC has added ready-to-eat varieties in retort pouches to cater to the local market.

The development is seen as a win-win business. While Cambodia still wants expertise in rice processing and marketing, some Thai exporters need to broaden their businesses to minimise risks locally. Thai rice exports are projected to drop sharply this year due to dwindling global demand and uncompetitive prices.

The Thai Rice Exporters Association also said the high paddy price offered under the current rice-pledging programme has eroded the competitiveness of Thai rice.

These factors would push down Thai rice exports this year to only 7 million tonnes, a 30% drop from 10.6 million tonnes shipped in 2011.

"In particular, less demand from Indonesia and Bangladesh is a factor that causes the decline," said Mr Wanlop, also the secretary-general of the association.

Indonesia imported more than 900,000 tonnes of rice from Thailand last year, a 230% jump year-on-year, while Bangladesh bought 736,782 tonnes, up 422% over the levels in 2011.

STC was a major beneficiary of the large orders from the two countries, catapulting it to the top spot in the exporters' rankings in 2011, with a total of 2.02 million tonnes shipped, or 19% of the 10.6 million tonnes the country exported last year.

But such a bonanza is unlikely to repeat his year as production in Indonesia and Bangladesh is rising, resulting in smaller imports, he noted.

The Food Agriculture Organisation forecasts the 2012 world rice output will rise 2.46% from last year to 461.44 million tonnes of paddy. Production from Indonesia and Bangladesh would increase by 5% and 2% to 37 million and 34 million tonnes of paddy respectively.

Consequently, world rice trade this year is expected at 32.8 million tonnes, down from 34.5 million tonnes in 2011.

Whether India would continue to export after completing sales of two million tonnes in the first quarter of this year is a condition that will affect the performance of Thai rice exports, he said.

India offered low selling prices at an average of US$433 a tonne for 5%-grade white rice, compared with $533 a tonne of Thai rice. India's 5%-grade parboiled rice was sold at $450 a tonne, about $100 lower than of the premium grade of Thai parboiled rice.

But there is a chance to see bullish trade in the first half this year, driven by possible large orders from Nigeria, Thailand's biggest rice buyer which bought 1.54 million tonnes of rice in 2011.

According to Mr Wanlop, the Nigerian government will likely increase the levy on rice imports in July, triggering a rush to import the commodity in the first half.

Besides expanding business to neighbouring country, STC has planned to complete the 500-million-baht improvement of its two rice-processing facilities in Ayutthaya and Samut Prakan provinces this year.

The project would enable the group to maintain a 18-19% share in the country's exports. Besides, it will focus more on retail sales by adding ready-to-eat rice products in retort pouches after its fragrant and organic rice products received a good market response, with about 40,000 tonnes in local sales

(Source: Bangkok Post, AGRIBUSINESS, STC ploughs its way into Cambodia, Joint venture to help reduce local risk, 6/02/2012, Walailak Keeratipipatpong, link)

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Cambodia Rice: World Rice News: Thai rice exports in May Rise Above Target This Year

Thai rice exports in May Rise Above Target This Year

Thai rice exports this year could rise above the targeted levels due to demand from key importers and limited supplies in other exporting countries, Chookiat Ophaswongse, president of Association of exporters of rice in Thailand, has Dow Jones said in an interview Friday. “Rice exports this year should reach 8.7 million (metric) tons, given the strong demand in world markets for Thai rice,” Chookiat said.

The Thai government has set a target of exporting 8.5 million MT rice for 2007, an increase of 16.4% compared to 7.3 million MT exported in 2006. Thailand, the world’s largest rice exporter, has already exported 2.52vmillion MT of rice of 25 April this year, up 11.8% on year, the Ministry of Commerce Department of Foreign Trade said Wednesday.

Chookiat said Indonesia, which has shown a keen buyer after unfavorable weather reduced production of rice there, plans to import up to 2.2 million million tonnes of rice in 2007 to fill a shortfall of domestic ‘ offer.

Indonesia was imported only 600,000 tons of rice in 2006. “Indonesia has no choice but to import more rice this year, while Vietnam is almost sold out, so we can earn huge export opportunities in Indonesia
market, “said Chookiat.

Vietnam has already signed contracts to export 3 million tonnes of rice a target total of 4 to 4.5 million MT this year. The increase in demand especially from Indonesia, China, Africa and countries are expected to help sustain the export price of Thai rice, he said.

Thai 100% grade B rice is currently offered at about $ 325 a metric ton, free-on-board Bangkok. Thailand likely to produce more rice for export, given its favorable climate, sufficient rainfall and anti-drought in rice growing areas, he said. Source: RiceNews

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