Developing Countries Will Lead Global Rice Import Growth in 2013-22, Says USDA Rice growers positive California MG prices are UP Russia MG Harvest coming to end Egypt open rice exports Vietnam’s rice export in tough competition with India Thai rice exports in May Rise Above Target This Year Viet-Nam Rice exports likely to fall this year
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Thai rice stocks seen as time bomb for world markets
Thailand's burgeoning rice stocks are a potential time bomb for world markets as Bangkok starts buying the new crop this week at even higher intervention prices.

Bangkok cannot keep adding to its bulging warehouses, and it remains unclear whether the rice will be dumped on international markets or left to rot.

``There are many stocks of last season's rice. And this season's rice is coming,'' said Sarayouth Phumiphon from the Rice Research Institute in Thailand.

He said releasing last season's stocks could boost exports in the next few months to raise 2005's total nearer last year's record 10 million tonnes.

The Thai government buys rice from farmers in an intervention scheme to support domestic prices, and was expected to buy nine million tonnes of paddy on Monday. It estimates a new crop could grow 14% to 21.27 million tonnes of paddy over last year, due to good weather and tantalising domestic prices.

So far this year, Thai exports have slumped by more than 20% as intervention prices, jacked up by 24-43% a year ago, amid competition from Vietnam, India, the United States and Pakistan.

Price spread between Thai ordinary rice and 5% broken rice from Vietnam widened to $41 a tonne during the first nine months of this year from an average of $14 in the five years to end-2004.

Bangkok raised the intervention prices by another 8% for the current crop in order to support its 16 million rice farmers grappling with record-high oil prices.

Traders and analysts said Bangkok could be forced to take action on its stocks of some 1.7 million tonnes of rice. A senior Thai official said the government was in talks to barter the rice away.

The Thai government did manage to sell 900,000 tonnes of milled rice in September to the country's leading exporter, President Agri Trading Co Ltd, for around $272 million. But traders said so far the company had not been able to sell much on the market due to the high prices.

Predictations are that 2005 Thai exports would fall to 7.1 million tonnes, while government stocks would increase by as much as half a million tonnes.

``The high Thai prices have resulted in rice coming out of the woodwork, with a number of its competitors enjoying their best year in a long time,'' he told the Beijing conference.

Exports from Vietnam reaching a record 5.3 million tonnes from 4.5 million tonnes last year, and Indian exports climbing to 4.4 million from 3.3 million.

To make things worse for Thailand, the country's annual rice surplus is set to expand to eight million from seven, according to Mr Vichai from the Thai Exporters' Association.

But he thinks Thailand should leave liquidation of the reserves to market forces, and learn from Japan which has huge rice stocks after intervention and has left consumers paying more than 15 times the international price for the grain.
MGR Archive 4.11.2005
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