We should ally with Vietnam, India to stabilise market, say stakeholders
March 31, 2008
Achara Pongvutitham
The Nation (Thailand)
Skyrocketing global rice prices have opened a window of opportunity for Thailand to become a "smart exporter" instead of resting on its laurels as the world's biggest exporter.
Now is the time to adjust the base prices for both local and export sales, traders and other analysts say.
As a smart exporter, Thailand should form an alliance with major rice-exporting countries such as India and Vietnam to strengthen their collective bargaining power in the international market.
Export prices should be set by exporting countries rather than at the demand of importing countries as in the past.
However, this does not mean that rice-exporting countries want to create a cartel. They only hope to stabilise rice prices through management of the market mechanism.
Rice-exporting countries should jointly set up an "ideal price" or "benchmark", based mainly on the same fixed costs of oil, fertiliser and other key factors of production. The strategy would provide security for both rice production and prices in the long run.
Stabilised prices would benefit the whole rice supply chain from farmers and millers to traders and exporters. They all share the same view, that now is the right time for the rice trading system to be restructured.
Between 2006 and 2017, the world's population is predicted to expand by 850 million people, which will lead to increased demand for resources.
The soaring popularity of alternative fuels has prompted farmers to grab land to grow high-priced crops.
Since December, prices of all grades of rice have shot up by more than US$100 (Bt3,150) per tonne, such as $646 to $755 on March 12 for jasmine rice and from $336 to $556 for grade B white rice.
"Rice now has comparable value with gold. Farmers have not gained from the peak prices as before. They sell only one tonne of paddy rice and can purchase one baht weight (15.16 grams) of gold ornaments worth Bt14,000 now," said Pramote Vanichanont, advisory president of the Thai Rice Millers Association.
Unharvested rice has been stolen from farms, causing villagers to keep watch over their fields day and night.
Thailand, India and Vietnam share the same problem. Their farmers are the poorest of their people.
They should jointly draw up a plan to stabilise both domestic and export prices.
The Commerce Ministry has said it will boost the local price to the exprt level. That means consumers will have to pay an extra Bt3-Bt5 per five-kilogram bag of jasmine rice.
Consumer have to pay an average of Bt20 per kilogram for rice compared with the peak export price of $755 per tonne, which translates to Bt23.4 per kilogram.
"The ministry wants to see the historic high prices directly benefiting farmers," Commerce Minister Mingkwan Sangsuwan said.
Just 30 million-35 million tonnes, or 7 per cent of the world's annual rice harvest, is traded in the world market, and because the volumes are so thin they are subject to price shocks.
China is the world's largest producer and consumer and also has the highest yields, but is not a key player in the export market, said Robert Zeigler, IRRI president. China guards its rice reserve levels as a "state secret", he said.
An unlucky confluence of events has pushed spot prices close to $1,000 per tonne, levels not seen since the scientific breakthroughs of the "green revolution" in the early 1980s boosted yields - and had since then helped keep prices below $400.
As seen by the facts, the biggest consumer has not exported rice, while India, with the world's second largest population, has banned rice exports as well as Vietnam, the world's second biggest rice exporter, as unusual weather has caused rice output to drop.
Indian farmers also turned to growing more wheat as the grain fetches a higher price. The wheat price has doubled to Bt14 per kilogram. Rice production has dropped since last year. The government is looking at methods to ensure food security for its one billion population.
Vattana Rattanawong, president of the Thai Rice Millers Association, said it was hard for millers to purchase rice as farmers want to sell at a higher price in line with market prices.
"Rice millers and exporters (who also operate rice mills) compete to buy paddy rice from farmers.
"Some of them have purchased rice at the field instead of waiting for farmers to bring it to the mills," he said.
Some rice millers who previously sold rice in the field on speculation also have been hard hit with losses, he said.
Rice millers want rice to trade at Bt9,000 to Bt9,500 per tonne. At that price farmers will enjoy 100-per-cent profit.
Prasit Boonchuey, president of the Thai Farmers Association, said the government should help farmers improve yields. This would enhance farmers' competitiveness by reducing production costs.
"We want to see Thai rice yields of 1,000 kilograms per rai," Prasit said.
Yields currently reach only 600-700 kilograms per rai for white rice.
Farmers plan to expand rice production to capture the booming market.
Recently, Chookiat Ophas-wongse, president of the Rice Exporters Association, said the high prices have prompted importers and buyers to delay placing more orders, while waiting for a price correction.
"The rising prices have shocked exporters, with the price surging $100 in one month. Thai exporters were also reluctant to ship during the past three months out of fear of price risks," Chookiat said.
As the world's rice supply shortage continues, farmers predict rice prices will further increase in line with demand. The government should manage to balance both demand and supply to reduce price speculation.
Chookiat predicted that rising commodity prices in the global market would shape a new era of agricultural goods prices.
March 31, 2008
Achara Pongvutitham
The Nation (Thailand)
Skyrocketing global rice prices have opened a window of opportunity for Thailand to become a "smart exporter" instead of resting on its laurels as the world's biggest exporter.
Now is the time to adjust the base prices for both local and export sales, traders and other analysts say.
As a smart exporter, Thailand should form an alliance with major rice-exporting countries such as India and Vietnam to strengthen their collective bargaining power in the international market.
Export prices should be set by exporting countries rather than at the demand of importing countries as in the past.
However, this does not mean that rice-exporting countries want to create a cartel. They only hope to stabilise rice prices through management of the market mechanism.
Rice-exporting countries should jointly set up an "ideal price" or "benchmark", based mainly on the same fixed costs of oil, fertiliser and other key factors of production. The strategy would provide security for both rice production and prices in the long run.
Stabilised prices would benefit the whole rice supply chain from farmers and millers to traders and exporters. They all share the same view, that now is the right time for the rice trading system to be restructured.
Between 2006 and 2017, the world's population is predicted to expand by 850 million people, which will lead to increased demand for resources.
The soaring popularity of alternative fuels has prompted farmers to grab land to grow high-priced crops.
Since December, prices of all grades of rice have shot up by more than US$100 (Bt3,150) per tonne, such as $646 to $755 on March 12 for jasmine rice and from $336 to $556 for grade B white rice.
"Rice now has comparable value with gold. Farmers have not gained from the peak prices as before. They sell only one tonne of paddy rice and can purchase one baht weight (15.16 grams) of gold ornaments worth Bt14,000 now," said Pramote Vanichanont, advisory president of the Thai Rice Millers Association.
Unharvested rice has been stolen from farms, causing villagers to keep watch over their fields day and night.
Thailand, India and Vietnam share the same problem. Their farmers are the poorest of their people.
They should jointly draw up a plan to stabilise both domestic and export prices.
The Commerce Ministry has said it will boost the local price to the exprt level. That means consumers will have to pay an extra Bt3-Bt5 per five-kilogram bag of jasmine rice.
Consumer have to pay an average of Bt20 per kilogram for rice compared with the peak export price of $755 per tonne, which translates to Bt23.4 per kilogram.
"The ministry wants to see the historic high prices directly benefiting farmers," Commerce Minister Mingkwan Sangsuwan said.
Just 30 million-35 million tonnes, or 7 per cent of the world's annual rice harvest, is traded in the world market, and because the volumes are so thin they are subject to price shocks.
China is the world's largest producer and consumer and also has the highest yields, but is not a key player in the export market, said Robert Zeigler, IRRI president. China guards its rice reserve levels as a "state secret", he said.
An unlucky confluence of events has pushed spot prices close to $1,000 per tonne, levels not seen since the scientific breakthroughs of the "green revolution" in the early 1980s boosted yields - and had since then helped keep prices below $400.
As seen by the facts, the biggest consumer has not exported rice, while India, with the world's second largest population, has banned rice exports as well as Vietnam, the world's second biggest rice exporter, as unusual weather has caused rice output to drop.
Indian farmers also turned to growing more wheat as the grain fetches a higher price. The wheat price has doubled to Bt14 per kilogram. Rice production has dropped since last year. The government is looking at methods to ensure food security for its one billion population.
Vattana Rattanawong, president of the Thai Rice Millers Association, said it was hard for millers to purchase rice as farmers want to sell at a higher price in line with market prices.
"Rice millers and exporters (who also operate rice mills) compete to buy paddy rice from farmers.
"Some of them have purchased rice at the field instead of waiting for farmers to bring it to the mills," he said.
Some rice millers who previously sold rice in the field on speculation also have been hard hit with losses, he said.
Rice millers want rice to trade at Bt9,000 to Bt9,500 per tonne. At that price farmers will enjoy 100-per-cent profit.
Prasit Boonchuey, president of the Thai Farmers Association, said the government should help farmers improve yields. This would enhance farmers' competitiveness by reducing production costs.
"We want to see Thai rice yields of 1,000 kilograms per rai," Prasit said.
Yields currently reach only 600-700 kilograms per rai for white rice.
Farmers plan to expand rice production to capture the booming market.
Recently, Chookiat Ophas-wongse, president of the Rice Exporters Association, said the high prices have prompted importers and buyers to delay placing more orders, while waiting for a price correction.
"The rising prices have shocked exporters, with the price surging $100 in one month. Thai exporters were also reluctant to ship during the past three months out of fear of price risks," Chookiat said.
As the world's rice supply shortage continues, farmers predict rice prices will further increase in line with demand. The government should manage to balance both demand and supply to reduce price speculation.
Chookiat predicted that rising commodity prices in the global market would shape a new era of agricultural goods prices.
6 comments:
the thai always forget to mention Cambodia as a rice exporter. thai bought a lot of rice from us this year.
with high rice price we should form a rice cartel (like oil cartel) to benefit rice produciing & exporting countries including Cambodia.
This sounds like OPEC of the rice industry.
I hope we can boost up our production and join the group.
Cambodia doesn't need the Thaicong cooperation! Once Cambodian government can take full control of Cambodian economy and Cambodia can overlook the Thaicong too!
Cambodia must look to the world!
Well, the Thaicong and Vietcong are the world leader in rice production, and we want to be apart of the family.
true, thailand should include cambodia when they talk about rice export/import because cambodia is one of the countries in asia that grow abundant rice and other crops as well, so if they don't mention cambodia when talking about rice export or what have you, then, they are still disrespecting cambodia. so to be fair, they should include cambodia, as we know, thailand bought a lot of rice from cambodia as well bu failed to mention it in the international market place.
No, they don't talk about Cambodia because we didn't exported much. That is all, but we will because they don't want competition but cooperation.
Post a Comment