Thailand braces for rice crisis

[Hugh_Hoy]

Means the toll for that highway will get more expensive.

 

HH

[WorldFun]

USD dip, recession all help to drive price of commodities up since it's preferably to park money there as opposed to falling/shaky USD.

 

And since also rice is (still) priced in USD do the math!

 

Of course if there's bad harvest in major exporters also then like wheat or salmon there's perfect conditions for price hikes, spekulation the works :-(

 

Likewise for BFs & LTs. If the breeding of sexy & horny bgs have a bad season you all know what that means - GTGs will have a field day!!!

[Flashermac]

Bangkok Post

29 Mar 2008

 

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.

 

 

[Old Hippie]

I better go stock up.

[redwood13]

From a NY Times article:

High Rice Cost Creating Fears of Asia Unrest

 

 

"Several factors are contributing to the steep rice in prices.

 

Rising affluence in India and China has increased demand.

 

Drought and other bad weather have reduced output in Australia and elsewhere.

 

Many rice farmers are turning to more lucrative cash crops, reducing the amount of land devoted to the grain.

 

And urbanization and industrialization have cut into the land devoted to rice cultivation.

 

In Vietnam, an obscure plant virus has caused annual output to start leveling off; it had increased significantly each year until the last three years.

 

Until the last few years, the potential for rapid price swings was damped by the tendency of many governments to hold very large rice stockpiles to ensure food security,........but those stockpiles were costly to maintain. So governments have been drawing them down as world rice consumption has outstripped production for most of the last decade.

 

The relatively small quantities traded across borders, combined with small stockpiles, now mean that prices can move quickly in response to supply disruptions.

 

At the same time, prices set in international rice trading now have an increasingly important effect on prices within countries. This has been particularly true in an age of Internet and mobile phone communications when even farmers in remote areas can learn about distant prices and decide whether their own buyers are giving them a fair price."

 

-redwood

[Faustian]

This has potential to be some really serious bad shit. It seems there are many food shortages about lately.

[Flashermac]

I noticed my very ordinary lunch of fried rice with shrimp cost me 5 baht more today.

 

 

[Guest lazyphil]

tescos boil in the bag rice price static, bought 2 boxs (4 pouches in each box) yesterday.....hopefully tescos strong arm bully boy tactics help keep my supply cheap!

[rchapstick]

USD dip, recession all help to drive price of commodities up since it's preferably to park money there as opposed to falling/shaky USD.

 

And since also rice is (still) priced in USD do the math!

 

Its about time someone blamed us Americans for this. I was getting lonely.

 

[dddave]

There is a typical, Chinese style rice shop just around the corner from where I live; just a bare bones shop house with a couple of rows of open rice sacks.

Price cards on top of the sacks used to read about B100-200 a kilo but started steadily rising a few months ago; now up to B350++.

My GF called her family in Khon Kean early this month and they discussed the economics of opening up several paddies that hadn't been planted for a number of years. The main problem is water supply; a good rainy season is desperately needed but there is also a severe labor shortage in rural areas. Most of the younger workers have left for jobs in the cities or other countries, there aren't enough productive field workers to go around.

 

I imagine that most of Isan is facing the same obstacles to ramping up rice production, I have a feeling that this will quickly become the years biggest issue.