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Rice trade seen thin in rest of ‘09, prices may drop

Rice trade seen thin in rest of ‘09, prices may drop
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First Published: Mon, Jul 13 2009. 09 03 AM IST
Updated: Mon, Jul 13 2009. 09 03 AM IST
* Trade to be thin in rest of 2009, IRRI analyst says
* Indian exports, Thai stockpiles may weigh on prices
By Apornrath Phoonphongphiphat
Bangkok: Global rice trade is likely to be thin in the second half of the year and prices could weaken since buyers expect supply to outpace demand as India resumes exports, a senior rice analyst said.
Samarendu Mohanty, head of the social sciences division at the Manila-based International Rice Research Institute (IRRI), said demand in 2009 as a whole would be much the same as last year but some big deals had already gone through.
“The Philippines is already out of the market as they’ve already procured what they wanted,” he told the agency.
He said some buyers had held back orders as the market realised there would be ample supply from India after it resumed exports following a hiatus of almost two years.
India banned rice export in late 2007 but has in recent months allowed the sale of non-basmati rice through specific traders.
Another factor would be how the Thai government decided to release rice from its stockpiles, Mohanty said, speaking ahead of a big rice convention in Thailand.
“Looking at the demand side, I think Africa is the only active buyer in the second half of this year,” he said.
That echoed the view of traders. They believe demand from African countries in the second half of this year should remain strong and expect them to buy 100,000-200,000 tonnes of Thai rice a month, mostly parboiled rice.
Around 300,000 tonnes of Thai parboiled rice was sold to African buyers in June after an estimated 250,000 tonnes in May , traders said.
Demand for parboiled rice has helped support prices in general in Thailand, the world’s biggest exporter, as parboiled rice is made from the benchmark grade of white rice paddy.
The benchmark 100% B grade white rice has been steady at $580 per tonne for the past month, even though demand for white rice, which accounts for around 50% of annual Thai rice exports, has been thin.
Mohanty forecast that export prices could drop slightly in late 2009, especially if Thailand released its stocks.
Its stockpile has risen to a record high of 6 million tonnes of milled rice, which senior officials said needed to be released soon in a bid to cut storage costs.
Mohanty forecast benchmark white rice could eventually move in a range of $525-$550 per tonne, while the broken grade 5% white rice should be in a range of $470-$500.
“I don’t think prices will go up to the $1,000 per tonne they were at last year. We’re not in that situation,” he said.
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First Published: Mon, Jul 13 2009. 09 03 AM IST