The Rice Crisis - newest development

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The Rice Crisis - newest development

Ungelesener Beitragvon newsclip » Fr Mär 28, 2008 8:22 pm

Rice sales crippled

Exporters unable to buy rice because of widespread hoarding and speculation have begun defaulting on orders from around the world worth up to $5 billion.

The president of the Thai Rice Exporters Association, Chookiat Ophaswongse said on Friday, "There will be a lot of defaults coming up, because we cannot find any rice in the market.

"What's happening now is a lot of traders have started to negotiate with buyers abroad on how to compensate them because we cannot buy any rice."

The rice trade has been hard hit this year by unprecedented price volatility in the market, sparked by India's decision to halt rice exports. Vietnam and Cambodia also have ordered a halt to foreign sales.

India traditionally exports about 4 million tons of rice a year.

"And this year they just stopped, so that 4 million tons out of a market of say 29 million tons was removed," said Chookiat.

Vietnam, the world's second largest rice exporter after Thailand, has also put a cap on its exports at about 3.5 million tons this year, 1 million tons less than expected, and Egypt has stopped all exports, taking another 1 million tons off the world market.

"So now everyone is turning to Thailand, and this is a problem," Chookiat told the news agency Deutsche Presse-Agentur dpa.

Rice exporters, who usually sell forward at a fixed price and then buy on the local market to meet orders, have suffered unprecedented losses this year in the face of dramatic price increases, sometimes jumping $20 a day per ton.

The price of 100 per cent Grade B white rice, for instance, has jumped from $420 per ton in early January to $720 now, almost doubling.

"By my estimates, the rice traders have lost around 4 to 5 billion baht ($127 million to $159 million), at least," said the rice trader.

Chookiat criticised Thai Commerce Minister Mingkwan Sangsuwan for encouraging Thai farmers to hoard their rice in order to fetch better prices for it. Not only farmers, but millers and local businessmen have started hording and speculating on Thai rice, creating an artificial shortage for exports.

The government currently has a 2.1-million-ton stockpile that it has promised to distribute to the poor to alleviate high rice prices.

The stock is expected to last about three months, after which the government will need to go to the market to replenish their stocks, predicted Chookiat.

The crunch for the export market will also come in three to four months, when Indonesia and Iran are likely to seek imports of 1.5 million tons and 1 million tons, respectively, to meet local demand, Chookiat forecast.

Thailand has been the world's leading rice exporter since the mid-1960s. Last year, Thailand's rice exports hit an historic high of 9.55 million tons, earning the country $3.6 billion.

This year's rice exports are estimated to reach 8.75 million tons, if exporters aren't forced to default on orders, earning as much as $4.7 billion.

Bangkok Post March 28, 2008

Maybe this is the way for some Isaan farmers to get back to a decent life after owing so much to the banks.

From other sources I hear that some start using water buffaloes again to work on their rice fields because they're cheaper than the machines and fuels.

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Re: Rice sales crippled

Ungelesener Beitragvon newsclip » Fr Mär 28, 2008 8:26 pm

Queen voices concern about rice problems

(BangkokPost.com) - Her Majesty the Queen is concerned about living conditions of the farmers after rice are reportedly stolen in many areas while there is a shortage of water.

According to Sing Buri governor Prapas Boonyindee, Her Majesty told her lady-in-waiting that she is worried about the farmers and would like provincial governors to look after them closely.

Prasert Kosalwit, director-general of the Rice Department, said Thursday the country could face a shortage of rice after skyrocketing prices have encouraged traders to substantially increase their export volumes. In Ayutthaya, meanwhile, about 10,000 rais of paddy fields have been ravaged by pests, which have been added to farmers' financial problems.

Mr Prapas said there is enough water for off-season ricefields at this period only. He encouraged farmers to plant crops that do not use a lot of water.

Bangkok Post March 28, 2008

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Re: Rice sales crippled

Ungelesener Beitragvon KoratCat » So Mär 30, 2008 8:29 am

Vietnam and India move to limit rice exports

HANOI: Vietnam and India on Friday tightened limits on rice exports, joining Egypt and Cambodia in trying to conserve scarce supplies for domestic consumption at the risk of triggering further increases in global rice prices, which have roughly doubled since the start of this year.

Soaring prices for rice, a staple for nearly half the world's population, are already causing hardship across the developing world, particularly for urban workers. Together with rising prices for other foods, from wheat and soybeans to pork and cooking oil, higher rice prices are also contributing to inflation in many developing countries.

Rice-importing countries have become increasingly desperate, with fast-food restaurants in the Philippines even cutting rice portions in half.

Ben Savage, a rice broker at Jackson Son & Co. in London, said that even before the latest restrictions by Vietnam and India, international rice trading had practically stopped as exporters had become reluctant to sell as they waited to see how high prices would go. "The market has pretty much ground to a halt for the past few weeks," he said.

Shipments are still being made to complete contracts signed months ago, and governments are still doing deals with each other using state-controlled companies. But with virtually no private contracts being signed, the rice market has become extremely volatile, with prices jumping ever higher as governments impose more export restrictions.

Global rice consumption has exceeded production in each of the last seven years, so rice stockpiles have been falling steadily. Rising affluence in India and China has increased demand even as a plant virus has damaged the harvest in Vietnam and poor weather has hurt output in other countries.

Vietnam, the world's second-largest rice exporter after Thailand, announced Friday that it would reduce rice exports by 22 percent in the hope of curbing the rapidly accelerating inflation rates in the country.

India on Friday set a new minimum price for rice exports of $1,000 a ton, far above the price of $700 to $750 for most grades of rice. The new price makes it unlikely that India will export any rice except the highest grades of basmati rice for which the market within India has long been small.

Cambodia said Wednesday that it was halting all private sector rice exports. Egypt has barred all rice exports starting on April 1; while Egypt bars exports each year to conserve supplies for domestic consumption, the Egyptian government has acted earlier than usual this year and after less rice than usual has been exported.

Thailand has not imposed restrictions yet, but there has been public discussion about doing so.

Vietnam's restriction "is sure to cause more concern among rice-importing countries and push prices even higher," said Duncan Macintosh, a spokesman for the International Rice Research Institute in Manila.

China to pay farmers more for rice

China said Friday it would pay farmers more for rice and wheat, trying to raise output and cool surging inflation that threatens to fuel unrest ahead of the Beijing Olympics, The Associated Press reported from Beijing.

Beijing has frozen retail prices of rice, cooking oil and other goods in an effort to rein in food costs, which jumped 23.3 percent in February from a year earlier. But analysts warn that holding down the prices paid to farmers will discourage them from raising production and easing shortages blamed for the increases.

The price increase is meant to "raise farmers' enthusiasm for growing grain and make progress in the development in grain production," the government's National Development and Reform Commission said in a statement announcing the change.

International Herald Tribune March 28, 2008

I'm just waiting for some dumb western economist to start talking about the "rice cartell".
Es gibt nichts Gutes, ausser man tut es! Erich Kästner, 1899 - 1974

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Export price of Thai rice soars

Ungelesener Beitragvon KoratCat » Sa Apr 05, 2008 10:00 am

Export price of Thai rice soars

Fears of local shortage rise, govt to meet today

PHUSADEE ARUNMAS and AGENCIES

The export price of Thai premium-grade rice broke the US$1,000 per tonne level yesterday, causing fears to mount about a local rice crisis and prompting the government to call an urgent meeting today to try to manage exports.

The historic-high export price was for Thai Hom Mali jasmine rice while prices of lower quality rice rose by $70-100 a tonne in the past week, according to the Thai Rice Exporters Association.

The price surge has caused alarm over a possible rice shortage in Thailand, the world's largest rice exporter, as exporters are boosting exports and traders are hoarding rice for speculative purposes.

Deputy Prime Minister and Commerce Minister Mingkwan Sangsuwan will hold a crucial meeting with private operators and officials today. On the agenda are the need to impose minimum export prices to control export volumes and measures to punish hoarders.

Moves by some large supermarkets to limit purchases of retail rice products and the sharp increase of retail rice prices have also got alarm bells ringing.

However, Prime Minister Samak Sundaravej yesterday told the public not to panic. He does not think the country will run out of rice because of its enormous rice-growing capacity.

He attributed the surging rice prices to market demand and said the situation would be short-lived. He dismissed speculation over a local rice shortage and said the government had over two million tonnes of rice in stock.

Internal Trade Department director-general Yanyong Phuangrat warned yesterday that traders who hoarded or inappropriately raised prices of rice would be punished harshly with a 140,000 baht fine and/or seven years in jail.

Meanwhile, Deputy Prime Minister and Finance Minister Surapong Suebwonglee, said Thailand has no plans to restrict rice exports.

''We don't want to abuse or to artificially influence the market,'' Mr Surapong said on the sidelines of a conference of Southeast Asian finance ministers in Vietnam.

''For the rice market in Thailand we try to follow [the rules of] supply and demand,'' he said.

There has been international market concern that Thailand would restrict rice exports along with Vietnam and India, the world's second and third-largest rice exporters, respectively. Vietnam and India have faced unfavourable crop supply, resulting in tight supply of rice on the global commodity markets.

Thai rice exporters are divided. One side wants the government to impose minimum export prices to control export volumes while the other opposes this.

Under the measure, the government would require exporters to sell rice at determined prices higher than the market price to slow exports. India has already imposed this measure.

Sompong Kitireanglarp, president of Ponglarp, one of the country's leading rice exporters, proposed that the Commerce Ministry impose the measure to cope with wild price fluctuations, which make it difficult to quote selling prices.

But Korbsook Iamsuri, secretary-general of the Thai Rice Exporters Association, disagreed with a minimum export price measure, saying it would do both harm and good. A high minimum export price would further inflate rice prices, she said.

The commerce minister has also ordered officials to keep checking government rice stocks to prevent rice theft.

According to permanent secretary for commerce Siripol Yodmuangcharoen, officials will check the warehouses of the Public Warehouse Organisation (PWO) and stocks of privately-owned rice mills that keep state rice.

The PWO has recorded overall state rice stocks at 2.1 million tonnes. The rice was acquired under the government's previous rice mortgage scheme to support rice prices.

The minister has a rice-checking committee headed by deputy permanent secretary for commerce Wararak Chansamart. The committee will start checking stocks next week with officials from the Internal Trade Department, the Foreign Trade Department and the PWO.

The committee will also ask provincial governors and officials to help check rice stocks in their provinces. It will take harsh action against any government officials who facilitate the theft of government rice.

Bangkok Post April 5, 2008

Won't it be hard for Mr. Mingkwan Sangsuwan all of a sudden to have to explain to people that they will get punished for doing what he himself encouraged them to do: hoard rice for price speculation :?:
Es gibt nichts Gutes, ausser man tut es! Erich Kästner, 1899 - 1974

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Poor farmers not benefitting from the soaring price of rice

Ungelesener Beitragvon KoratCat » Mo Apr 07, 2008 11:12 am

Poor farmers not benefitting from the soaring price of rice

Loans from traders keep growers in debt

SUNTHORN PONGPAO

AYUTTHAYA : Poor rice farmers do not feel that the soaring export prices will leave them any better off as they cannot sell their grain at these figures and must still seek loans to plant, tend and harvest their crops. Staporn Kitamnuaypong, who sells fertiliser in Sena district, said poor farmers are forced to make deals with traders.

Some firms will lend crucial ''production factors'' such as rice, seeds, fertiliser and tractor fuel without the farmer paying any money up front.

But when the crop is ready for harvest it must be sold to those traders at prices agreed upon in the contract.

This practice, known as tok khiew or green harvest, has been widespread for more than a decade, he said.

Mr Staporn said he had never tried to take advantage of farmers in this way.

He usually reached a deal to lend them the production factors they need first.

When their crops are harvested the farmers sell their grain where they wish. They repay him from the profits and he charges no interest, he said.

Wichian Phuanglamchiak, of the Thai Farmers Association, said tok khiew is most common in northeastern provinces as such as Mukdahan, Buri Ram and Chaiyaphum.

Farmers could accept the price agreed upon in contracts reached with traders as these prices are usually regulated by market mechanisms.

However, some traders also charged loan interest, Mr Wichian said.

Farmers bound by these contracts could find themselves in deep trouble if their crops were damaged or ruined by natural disasters such as drought, floods or pests.

These crops were the only source of income and without them they had no money to pay off their debts. All too often they lost their land to the lender, Mr Wichian said.

''The government must come up with urgent measures to bail farmers out of their debts,'' he said.

A proposal by Commerce Minister Mingkwan Sangsuwan that farmers store grain and sell when prices rise was difficult to put into practice.

Many farmers did not have storage facilities and some had already made loan arrangements with traders.

Others had to rush to sell their crops immediately just to get enough money to subsist and invest in the next round of planting, he said.

Bangkok Post April 7, 2008
Es gibt nichts Gutes, ausser man tut es! Erich Kästner, 1899 - 1974

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200,000 tons of government rice go missing in Thailand

Ungelesener Beitragvon KoratCat » Di Apr 15, 2008 7:24 am

200,000 tons of government rice go missing in Thailand

Bangkok - An estimated 200,000 tons of rice, worth 100 million dollars, has gone missing from national warehouses in Thailand this year as world prices of the commodity soared, state media reported Monday. The grain has disappeared from the government's rice stockpile of 2.1 million tons, kept in national warehouses as a means of curbing high prices on the local market and assuring a food supply for the poor, said Bank of Thailand (BoT) senior economist Benjamas Kotenongbua.

Benjamas told the Thai New Agency (TNA) that the "missing" rice was worth an estimated 3.2 billion baht (101.5 million dollars), and rising.

Rice prices have almost doubled this year, as artificial shortages have been created in the world market by bans on rice exports in India and Vietnam, usually two of the world's largest rice traders.

In Thailand, which is expecting a bumper rice crop this year, exporters are having trouble meeting orders recently because of domestic shortages of the grain caused by hoarding.

The government is also having trouble buying new supplies of rice for its stockpile, and holding on the stocks that are supposed to be in the warehouses, said the TNA.

The government-sponsored "mortgage programme," by which the state purchased rice at a favourable price to fill its warehouses, saw commitments of only 240,000 tons of rice in the 2007-2008 rice-growing season, compared to earlier estimates of 8 million tons, said Benjamas, who works at the central bank's Khon Kaen office.

"The major reason for the sharp drop of rice participation in the programme was the result of soaring of rice prices which persuaded farmers and middlemen not to sell rice to millers," she said.

In the first three months of this year, Thailand exported a total of 3.26 million tons of rice, almost double of exports during the same period in 2007.

But there are doubts that Thai exporters will be able to meet orders in the future as the domestic supply dries up.

Earthtimes April 14, 2008

I wonder whether the newly elected keyholders distributed it to the people. Or were they just framed by the military to justify another coup?
Es gibt nichts Gutes, ausser man tut es! Erich Kästner, 1899 - 1974

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Thailand proposes rice cartel idea

Ungelesener Beitragvon newsclip » Sa Mai 03, 2008 9:36 am

Thailand proposes rice cartel idea

BANGKOK, Thailand (CNN) -- Thai Prime Minister Samak Sundaravej piqued global interest this week when he suggested the formation of a rice cartel with other producers, a government spokesman said.

Rice prices have tripled this year, reaching $1,000 a ton for 100 percent Grade B white rice.

The idea came as his deputy and commerce minister proposed a rice producer summit that would include Thailand, Vietnam, India and China. Only India has so far voiced support; it is second to Thailand as the world's largest rice producer.

The notion of a rice cartel comes amid skyrocketing food prices that have been linked -- at least in part -- to rising energy costs, the business of another cartel: the Organization of the Petroleum Exporting Countries, or OPEC. Its 12 member nations supply about 40 percent of the world's oil.

Laos Foreign Ministry spokesman Yong Chanthalansy said Friday the Laotian government would "seriously consider" the idea of creating a cartel to gain "bargaining power," The Associated Press reported.

"Our priority is to help vulnerable groups in the country, both the producers and consumers," AP quoted Yong as saying. "We are especially vulnerable because we are a landlocked country so everything depends on irrigation."

Cambodia, which in the past has championed the rice cartel idea, also welcomed the latest proposal and said it was a "necessity" given the current global food crisis, AP reported.

"By forming an association, we can help prevent a price war and exchange information about food security," AP quoted Cambodia's chief government spokesman Khieu Kanharith as saying.

The United Nations is establishing a task force to address what it calls a global food crisis.

In early April, the Indian government announced a ban on exports of low-grade rice, which is essentially produced for domestic consumption, in an effort to control a surge in local food prices amid tightening supplies.

"There's no shortage of rice in India, but our buffer stock of rice has fallen. This means we could be going into the danger zone," said Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce & Industry.

Vietnam and Cambodia -- other major rice producers -- also have placed restrictions on rice exports.

Meanwhile, the Thai cabinet recently decided to release more than 2 million tons of rice to the domestic market in order to maintain the price of rice in the country. The typical goal of a cartel is to regulate prices.

Last week in the United States, warehouse retailer Sam's Club, a Wal-Mart division, announced it would begin limiting specialty rice sales. A similar retailer, Costco, reportedly took similar action, but no limits were put on the purchase of the mass-market rice that's primarily consumed in the United States.

CNN May 2, 2008


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