[Thai] Rice farmers need help now

Thursday June 05, 2008
Bangkok Post EDITORIAL

A few months back Thai farmers were jubilant as never before. Rice millers and exporters, too, were all smiles. Thanks to the shortfall in rice production worldwide due to natural disasters, plus the grim prediction of potential food shortages by the United Nations, the domestic and export prices of Thai rice skyrocketed to unprecedented levels, as foreign buyers headed for Thailand with their purchase orders.

The euphoria was such that Commerce Minister Mingkwan Sangsuwan told farmers not to rush and sell their harvested grain, as they might get much higher prices if they waited a little longer. All of a sudden, rice became a precious commodity. Many farmers had to spend sleepless nights guarding their rice fields to prevent thieves from stealing the grain. There was even talk of landlords turning to farming the land themselves to reap the rare windfall, instead of renting their acres to farmers. Or turning unused land into rice fields.

Unfortunately, the euphoria was short-lived. Exporters simply stopped buying, prompting millers to do likewise, citing liquidity problems. As a consequence, paddy prices started to nosedive, prompting farmers in Chiang Mai and Chiang Rai to take to the streets and demand that the government shore up prices for their produce. They claim the millers have suppressed the price of their paddy to as low as 6,000 baht a tonne, claiming the amount of humidity in the grains exceeded the 15% limit.

Frustrated by what they allege to be slow government response to their demands, the Rice Farmers Association has threatened to bring farmers from across the country to block all major in-bound roads to Bangkok tomorrow, if they do not get satisfactory answers to their demands.

In the meantime, truckers have also threatened to descend on the capital with their trucks in seven days, if the government fails to come up with measures to cushion the impact of rising fuel prices.

Despite these threats by farmers and truckers, as well as the pressing economic problems driven by increasing oil prices which are seriously affecting people from all walks of life, it appears the government is more preoccupied with its political agenda: how to deal with the PAD demonstrators and whether Article 68 of the Constitution should be invoked to disperse them, and whether the bid to amend the charter should be suspended.

This self-serving political agenda must be dropped at once. The government must wake up and quickly tend to the pressing economic problems, in particular the farmers' plight. The National Rice Committee headed by Prime Minister Samak Sundaravej, which is supposed to deal with the problem of plunging paddy prices, must come up with solutions immediately. The prime minister must call an urgent meeting of the committee if he is genuinely concerned about the plight of farmers and really wants to help.

Since the cabinet on May 13 announced price guarantees for jasmine paddy at 19,000-20,000 baht a tonne and regular grade paddy at 14,000 baht a tonne, this pledge must be kept. The rice mortgage scheme must be activated quickly to shore up paddy prices.

In order to pre-empt the farmers' threatened protest, the government yesterday decided to set aside 22 billion baht to implement the rice mortgage scheme. But the decision has yet to be endorsed by the National Rice Committee, which is due to meet next week. The farmers are already in hardship and need help now. There should be no further delay or bureaucratic red tape in launching this scheme.

U.S. rice falls on Cambodia, soy up on supply woes

Mon May 26, 2008

TOKYO (Reuters) - U.S. rice futures fell by the 50-cent limit on Tuesday after Cambodia lifted an export ban, while soybean futures jumped more than 1 percent on supply fears following a long-running farmers' dispute in Argentina.

Traders said Cambodia's decision to lift the two-month export ban on Monday and expectations that Vietnam would lift curbs from July were signs that rice supplies were likely to improve, helping world prices to ease from record levels.

"The lifting of the ban is having some impact on prices," said Vijay Iyengar, managing director of Agrocorp International Pte Ltd, a Singapore-based commodities trading firm.

U.S. rough rice futures on the CBOT fell 2.5 percent, or down by the 50-cent-limit, to $19.85 per hundredweight, carrying over the downward trend from Friday.

Chicago Board of Trade soybeans, corn and wheat futures advanced as bullish crude oil prices and a weaker dollar prompted fund inflows into the grains market.

"The market is worried about supplies from Argentina, keeping soy prices strong," said Kenji Kobayashi, a grains analyst at Kanetsu Asset Management in Tokyo.

"Uncertainty is especially big for the nearby contract, keeping the market in a backwardation."

The soybean contract for July delivery rose as high as $13.85 per bushel, up 1.2 percent from Friday's U.S. close of $13.68. U.S. markets were closed for a public holiday on Monday.

Concerns following a labor strike in Argentina have been boosting grain and oilseed prices.

The Argentine government has called off talks with farmers scheduled for Monday, a day after farm leaders angry at a tax on soy exports held the biggest protest yet against the current administration.

Argentine farm leaders demanded a new government farm policy in front of a crowd of more than 200,000 people on Sunday, showing strength ahead of negotiations to resolve the three-month-old conflict over soy taxes.

"The general uptrend in the grains market remains," Kobayashi said. "There is still momentum in the market, helped by the strength in oil prices and the bearish dollar."

Key U.S. crude oil futures held above $133 a barrel on Tuesday as long-term supply concerns lingered and fresh production problems appeared in Nigeria and Norway.

Oil prices have risen nearly 40 percent this year, reaching a record high of above $135 last week.

The dollar held its ground on Monday, taking advantage of the ultra-thin volumes owing to U.S. and UK market holidays to arrest its decline of the last three weeks and squeeze out slender gains against a basket of major currencies.

July CBOT corn was trading up 4-¾ cents at $6.04-½ per bushel from Friday's close of $5.99-3/4. It briefly touched a session high of $6.07 on Tuesday.

(Reporting by Chikafumi Hodo; Editing by Clarence Fernandez)

Rice market eases as Cambodia lifts ban on exports

May 27 2008
By Javier Blas in London
Financial Times (UK)

The rice market showed tentative signs of easing yesterday after Cambodia became the first country to lift trade restrictions on the grain.

Cambodia, the world's eighth largest rice exporter, imposed a ban on foreign sales two months ago to fight food inflation. But Hun Sen, prime minister, yesterday said the country was no longer facing a rice shortage.

"The ban on the rice exports is being lifted from now on," he said. "We have over 1m tonnes of rice that needs to be exported. We don't have any shortage."

Thailand medium-quality rice, the global benchmark, slipped below $1,000 a tonne following Cambodia's decision. Traders in Bangkok quoted indicative offers for this rice at about $920 a tonne, well below last month's record of more than $1,100 a tonne.

Mr Hun Sen said the lifting of the ban would help reduce "concerns of the world, especially that of the Philippines" over supplies of the grain. The Philippines is the world's largest rice importer.

The price of rice jumped from about $350 a tonne a year ago to April's record on the back of trade restrictions imposed in late 2007 and early this year by leading exporters Vietnam, India, Egypt, China and Cambodia.

The restrictions closed about a third of the international rice market, triggering panic buying by countries such as the Philippines. Rice is a staple of 3bn people in south-east Asia, west Africa and central America.

Importing countries reacted to surging prices by scrapping rice tariffs. Mexico on Sunday became the latest importer to eliminate import tariffs on staples including corn, rice, wheat and sorghum.

Analysts and traders said other rice-exporting countries might now ease their restrictions, although they warned such a move would depend on the size and quality of the new crop, which will be harvested after the summer.

Concepción Calpe, a rice expert at the UN's Food and Agriculture Organisation in Rome, said other leading exporters would wait until it became clear whether the expected bumper crops materialised.

"India will wait for the arrival of the monsoon rains before deciding whether to ease its trade restrictions," she said.

In the wheat market, Ukraine - one of the world's top-10 exporters - also lifted its trade restrictions earlier this month, helping wheat prices to fall to the lowest level in six months.