AGRICULTURE

PHUSADEE ARUNMAS

Rice prices are expected to remain at high levels in the second half although several exporting countries are preparing to lift bans on foreign shipments.

"Rice prices are near their peaks. We believe they may increase or fall within the 10% range," said Chookiat Ophaswongse, president of the Rice Exporters Association. "There is no way for the prices to dip below US$600 per tonne although India, Vietnam and Cambodia have resumed their foreign shipments."

Cambodia yesterday became the first rice exporter to lift a ban on foreign shipments. Some Asian countries have banned their rice exports over the last six months to protect domestic supplies in face of soaring international prices.

Cambodia produced a record 6.4 million tonnes in its 2007-08 crop year, giving it a 2.6-million-tonne surplus for export.

A week ago, the Vietnamese government said it might lift its ban on rice exports in early July as planned. Its contracted export volume has so far made up about two thirds of the annual target.

To date, Vietnam has secured contracts to export 2.4 million tonnes of rice, or nearly 70% of its 3.5-million-tonne sales target for this year.

Mr Chookiat said that even as Vietnam resumed its rice exports in the second half, the shipments were unlikely to surpass two million tonnes due to restrictions on export procedures and limited competitiveness in logistics facilities, he predicted.

More importantly, Mr Chookiat said accelerated exports might add pressure to Vietnam's inflation, which was currently high at about 16-17%.

In the case of India, Mr Chookiat said it remained uncertain whether the country would be able to resume its rice exports.

India in October last year banned the exports of non-basmati rice to rein in prices and control inflation. But later in the month, it eased the ban on some superior varieties of the grain.

New Delhi in March banned the exports of non-basmati rice again after inflation hit a 14-month high, alarming policymakers who later slapped export taxes in April on basmati rice, on top of an existing ban on non-basmati rice exports.

India shipped about five million tonnes of milled rice in 2007.

"Demand for rice is strong. The Philippines still needs to purchase about 300,000 tonnes of rice, while Malaysia wants 300,000 tonnes more after deals to buy 200,000 tonnes have been signed recently. Iran, which annually buys several hundred thousand tonnes of rice from Thailand, has yet to make a tender, and Bahrain is weighing its decision," he said.

By Bangkok Post On 27 May 2008

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