Results 1 to 2 of 2
  1. #1
    Mid
    Mid is offline
    Thailand Expat
    Mid's Avatar
    Join Date
    Aug 2007
    Last Online
    @
    Posts
    1,413

    Why have rice prices surged to record highs?

    Why have rice prices surged to record highs?
    April 25 2008

    Asian rice prices have almost trebled this year and prices on the Chicago Board of Trade have risen more than 80 percent to hit successive record highs as export restrictions by leading suppliers fuel insecurity over food supplies.

    With only 30 million tonnes traded annually, government supply curbs such as those from New Delhi and Hanoi have spooked importers such as the Philippines and Bangladesh, at a time when global stocks have halved since hitting a record high in 2001.

    Export curbs:

    * October 2007 - India, the second-largest rice exporter after Thailand, bans exports of non-basmati rice to rein in prices and control inflation, but later in the month eased the ban on some superior varieties of the grain.

    * March 2008 - India bans exports of non-basmati rice again as inflation hits a 14-month high, alarming policymakers.

    * March 2008 - Egypt bans rice exports from April 1 to October to hold down local prices. The country normally produces about 4.6 million tonnes a year of white rice, leaving a domestic surplus of about 1.4 million tons for export.

    * April 2008 - Vietnam, the third-largest exporter, extends a ban on rice sales until June to help stabilise domestic food prices as it tries to tame double-digit inflation. Prior to that, it had curtailed exports for March and April.

    * April 2008 - Brazil temporarily suspends rice exports to safeguard domestic supply and keep prices of the basic foodstuff stable. Brazil, which is not a major global rice supplier, exported 313 000 tons of rice last year.

    * April 2008 - Indonesia, Southeast Asia's largest rice consumer, says it would curb medium-grade rice exports to combat inflation. Under Indonesia's new rice export rules, state procurement agency Bulog is allowed to sell medium-grade rice overseas only when national stocks are above 3 million tons and domestic prices are below a government's target price.

    Scramble to build stocks

    * January 2008 - Bangladesh signs deals and starts importing 180,000 tonnes of white rice from neighbouring Myanmar. The Bangladeshi government and private traders started importing rice after crop losses caused by flooding last year.

    March 2008 - The Philippines says it aims to import up to 2.2 million tons of rice this year to meet a domestic shortfall, in what could be the biggest overseas purchase of the staple in a decade. Local harvests have failed to keep up with expanding population, lifting inflation to a 16-month high.

    * March 2008 - Costa Rica expects its rice imports to jump 31 percent to 190 000 tons in the 2008/09 crop year, which begins in July, as farmers replace some rice fields with other crops such as sugar cane and pineapple. Bad weather in the remaining rice-growing areas also has cut yields.

    * March 2008 - Bangladesh says it would import 400 000 tons of rice from India to cushion the country's dwindling stocks. The imports, allowed under a government-to-government deal, would not be subjected to the rise in rice export prices.

    * April 2008 - Singapore says it would allow rice importers to bring in more stock to meet increased demand amid consumer fears of a rice supply crunch and higher prices.

    Falling world inventories

    World inventories have fallen by nearly 50 percent from a record high of 147.1 million tons in 2000/01, although they have already recovered slightly from a low in 2004/05. They are expected to rise marginally by the end of this crop year. Year Production Exports Domestic Ending

    Consumption Stocks 2000/01 398.9 24.4 395.3 147.1 2001/02 399.7 27.9 413.5 133.3 2002/03 378.1 27.6 407.9 103.5 2003/04 391.7 27.2 413.2 82.1 2004/05 400.8 29.2 408.4 74.4 2005/06 418.1 29.4 416.0 76.5 2006/07 420.6 30.3 420.9 76.1 2007/08 425.3 27.5 424.2 77.2

    Source; USDA data. Figures are in millions of tons.

    Speculative buying

    On the Chicago Board of Trade, financial speculators looking for the next big commodity play, have helped lift prices by about 80 percent this year to successive record highs. To a degree, hoarding by consumers has also fed the rise by spurring importers to seek supplies sooner.

    Diversification of land use

    In some countries such as the Philippines, production is failing to keep up with demand because paddy land is being overtaken for industrial development, or because farmers are seeking other trades. This is a longer-term issue that should contribute to supply tightness in the future.

    Growing demand

    In poor nations facing a doubling in wheat and corn prices, rice consumption is rising, but this is partly offset by falling per-capita consumption in big countries such as China.

    Data from the US Department of Agriculture shows that consumption in China - which accounts for 30 percent of world consumption - has fallen by 3.9 percent over the past five years.

    But global consumption has risen by 2.7 percent over the same period, in places such as Nigeria, the Philippines and Bangladesh.

    iol.co.za

  2. #2
    I am in Jail

    Join Date
    Oct 2007
    Last Online
    26-06-2015 @ 01:33 AM
    Location
    โรงแรมม่านรูด
    Posts
    4,290
    Price surge draws Thai-Chinese rice barons into spotlight

    24 Apr 2008
    Price surge draws Thai rice barons into spotlight

    BANGKOK (Reuters) - Every Wednesday for as far back as anybody can remember, a small group of Thai-Chinese businessmen have met for lunch down a leafy lane in central Bangkok before sitting down to set world rice prices.

    For decades it was a sedate affair, a bowl or two of, appropriately, rice followed by a leisurely chat between old friends about anything affecting global supply and demand: a bad flood, say, in Thailand, the world's biggest exporter, or a failed harvest in Iran.

    Full of food and the latest news, these 35 barons of the rice world would then recommend a price per metric ton only a few dollars different from the previous week, before heading for home.

    It may only have been an "indicative" level, but few countries or exporters could risk deviating too far from the benchmark set by the big hitters of Thailand's Rice Exporters Association, the guardians of nearly a third of all the rice to be traded globally.

    That all changed late last year when India imposed export curbs to protect domestic supplies after severe flood damage to crops.

    Vietnam, which vies with India to be the world's number two exporter, followed suit a few months later, triggering concerns about Asia's ability to feed itself and pushing prices to record highs of nearly $1,000 a metric ton, three times their 2007 average.

    Now, the price of Thai 100 percent B grade white rice, the world's de facto benchmark, is moving 10 percent in a week and making governments across Asia nervous about possible unrest stemming from the soaring cost of the region's staple food.

    Suddenly, a lot of eyes are trained on the second floor boardroom of the Rice Exporters Association in Bangkok.

    "It's been a tradition for many years. They have lunch first at 12 and then at 1 they review the situation in world markets," association managing director Charin Hansuebsai told Reuters.

    "But the mood has changed a lot in the last few months. In the past, the price moved very slowly, but now it's very difficult to get consensus," he said.

    "Normally it's a buyers' market -- they can shop around between different sellers. Now its definitely a sellers' market."

    RICE EMPIRES

    After they agree on a price, the association passes it on by letter -- or more recently email -- to its 180 members late that evening. It still takes a day or two for the new price to make it onto the association website.

    In reality, most exporters have tended to sell at a slight premium -- if they can get away with it -- or a discount to make their long-time customers in trading houses in places like Hong Kong, China and Singapore feel they are getting a good deal.

    "You have to be sincere with your customers. If you don't have a relationship, you will go out of business," said Charin, a former Commerce Ministry trade official.

    Judging by the chauffeur-driven Mercedes and BMWs in the car park, and the number of huge Thai business empires controlled by ethnic Chinese families with roots in the rice trade, it is a strategy that has paid off handsomely.

    But the 2008 price surge, which some analysts are describing as hysteria, others as the dawn of a new era of expensive food, is straining the old loyalties and traditions at an institution with a 90-year history.

    Some members are quietly quoting rice at a premium of more than 10 percent of the recommended price.

    Last week, rival exporters in Vietnam were quoting at more than $1,200 a metric ton -- a 25 percent premium to the then Thai benchmark -- in an incomplete tender to the Philippines.

    Gauging accurate price levels has never been this tough.

    "They've got a lot of experience in the business and they know how far they can go. But the situation of the last few months has never happened before," Charin said.

    (Editing by Darren Schuettler and Sanjeev Miglani)




    Thats why, and so Samak was wrong to blame the farmers

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •