5th June 2014 Daily Global Rice E-Newsletter by Riceplus Magazine

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TOP Contents - Tailored for YOU
Latest News Headlines
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"
Vietnams future as rice supplier to China still bright: experts
East African Countries Hike Rice I mport Duty To 35%
J unta urged to replace rice scheme
Yingluck, 4 others face assets probe
Rice policy to save Nigeria $2.5b, says Adesina
CoolClownFishs Blog I raq 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 90-
percent 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
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 worlds top rice exporter in 2012 as the scheme, which was meant
to help poor farmers, caused a hike in export prices
.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.Thailands 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
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 $20-
30 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
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 sub-
committee 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"

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)

Vietnams 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.
Vietnams 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 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 Vietnams rice. It bought 41.75 percent of Vietnams total rice exports in the first five months of
the year.Analysts say this scenario will not occur because China will still need Vietnams 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.
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 cropsboth cash and goods, which have been marketed through official channelshave
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


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 rice-
pledging 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 juntas 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)


Image: 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 Governments 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.
CoolClownFishs 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


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.


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

Thailands rice exports are growing, but the Southeast Asian country
is unlikely to get back its lost crown as the worlds 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.Indias rice exports are
forecast at 9 million tons this year followed by Vietnams 7.4 million
tons and Thailands 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 countrys 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 partys 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 isnt 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)
governments 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.


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 Thailands largest exporters of premium-grade Jasmine rice.Thailands
5% broken grade of white rice is now offered around $425 per ton, loaded on ships, down 12% from six weeks
earlier. Vietnams 5% broken rice is offered at $370 per ton down from $390 per ton six weeks ago.Thailands
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 Thailands 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 worlds second-largest
exporter in 2014, the grains council said in a report last month.But the boost isnt 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, Thailands 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 worlds five major exporters are at an all-
time 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 Indias 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
Thailands 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
associations data.Traders say rice that eventually will be sold in Nigeria, the worlds 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 Thailands 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.

5th June 2014 Daily Global Rice E-Newsletter by Riceplus Magazine

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5th June 2014 Daily Global Rice E-Newsletter by Riceplus Magazine

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