Rice market quiet again following mid-year price spike
Written by Writer on Monday, October 13th, 2008
AGRICULTURE
Rice market quiet again following mid-year price spike
WALAILAK KEERATIPIPATPONG
Relative quiet is expected to prevail in the thai rice market over the rest of this year as buyers will opt for only small amounts, in contrast to the big lots acquired during the food crisis in the middle of the year, rice traders say.
”The amounts are just hand-to-mouth and some shipments are as low as merely 1,000 tonnes,” said Korbsook Iamsuri, chief executive officer of Kamolkij Group of Companies, one of Thailand’s leading rice exporters.
She attributes the slow market to forecasts of greater supplies of rice from major producing countries such as Vietnam, which quotes about US$500 a tonne for white rice, much lower than $600 to $700 offered by Thai exporters.
Another major producer and exporter, India, is reported to have ample rice reserves and Ms Korbsook believes Indian authorities will lift their export ban next month or in February at the latest.
Market prices have kept falling since August after having shot up to an average of $990 per tonne of white rice in May, and $1,187 for Hom Mali fragrant rice in the same month. The rises, prompted by concern over a shortfall of food supplies and high oil prices, brought heavy orders from abroad.
”Considering the eight-month sales, some countries bought large amounts that were just enough for the entire year’s consumption and this has resulted in sluggish sales today,” she said.
Data from the Board of Trade of Thailand show that Nigeria imported more than 600,000 tonnes of rice in the first eight months, up 338% over the same period last year, and much more than the average of 300,000 to 400,000 tonnes it bought in the previous two years.
Mrs Korbsook, also the secretary-general of the Rice Exporters Association, expects that foreign buyers will remain reluctant since they are not sure if prices have reached bottom yet.
Foreign markets are also waiting for details of pledging prices of Thailand’s next rice intervention programme for paddy that will be harvested starting next month.
”The rice market now has turned to buyers’ hands again and I don’t think next year will be the golden year for the Thai rice industry that this year was,” she added.
Wanlop Pichpongsa, an executive of Capital Rice Co, the country’s largest rice exporter, said that given the current situation, the government should be cautious in its price intervention programme and prices for paddy from the new harvesting season.
Mr Wanlop said that in setting pledging prices, the government should take factors such as world’s grain supply and market competition from Vietnam and India into consideration.
Hence, prices might not be as high as the ones the government set for second-crop paddy in 2007-08, which was harvested in the second quarter of this year.
”I agreed with the high prices paid for the last crop, but the current situation is different,” he said.
The Commerce Ministry earlier announced it would buy as much as eight million tonnes of paddy from the new season at prices not over 14,000 baht a tonne for premium white rice. However, the price is expected to be revised.
Thailand plans to export about 9.5 million to 10 million tonnes of rice this year, and of which 1.8 to 1.9 million are from companies under Capital Rice Co.
Bangkok Post
