Rice prices will remain stable as several rice-producing countries have suffered abysmal harvests, the Foreign Trade Department says.
A spate of natural disasters, dry weather and monsoons have crimped global rice production, said Vichak Visetnoi, director-general of Foreign Trade Department.
"Drought-stricken India is expected to see its production drop by 15-16 million tonnes, while cyclones in the Philippines will cripple its harvests," he said. "Egypt also still bans its rice export because of water problem, while dry El Nino weather will shrink output in Australia and Indonesia is suffering from earthquake. Rice prices have thus no way to fall."
Rice production has lagged demand in four of the past eight years. Rising consumption is expected to erode global stockpiles by 41% to 85.9 million tonnes in the 2009-2010 marketing year, down from a record 146.7 million tonnes in 2001-2002, according to the US Department of Agriculture.
Chookiat Ophaswongse, president of the Thai Rice Exporters Association, urged the government to sell some of its rice stockpile given the stable price outlook.
"Unlike the private sector, authorities are not flexible enough to manage the rice sales once the market becomes severely volatile," said Mr Chookiat.
The government plans to sell 950,000 tonnes of rice from its stocks through government-to-government deals in the remaining two months and will release another 1.77 million tonnes in 2010.
The government is estimated to have six million tonnes of milled rice in its stores, bought from farmers under previous price-intervention schemes.
The free-on-board price of benchmark Thai white rice 100% Grade B is now quoted at US$520-530 per tonne. The prices may rise to $650 per tonne in the first quarter next year, said Mr Chookiat.
The Indian crop yield could drop by 16% this harvest. The country may buy as much as three million tonnes of rice from overseas next year, making it a net importer for the first time in 21 years.
Source: Bangkok Post
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