[Thailand] Rice exports hit by fall in prices, demand amid soaring supply

May 20, 2009
By Petchanet Pratruangkrai
The Nation

Thai rice exports will suffer this year, with prices set to decline into next year from increased supply in the world market and bearish demand, a seminar heard yesterday.

Moreover, Thai rice trading will face more problems due to insufficient development of both crop production and irrigation. Several recent administrations have been unclear on development of a sustainable rice policy.

The crop is a major export for the Kingdom.

At a seminar yesterday hosted by Thai Rice magazine entitled "Rice Price Trends: Reduced Risk for Coping with the Global Crisis", traders, government officials and economists said the price was set to drop slightly into next year, due mainly to a combination of lower demand and greater supply.

Thai Rice Exporters Association president Chookiat Ophaswongse said more rice exporters had entered the market this year.

"Burma and Cambodia have started exporting large amounts of low-grade rice for less than US$300 [Bt10,200] per tonne to the world market.

"India will soon export up to 3.5 million tonnes of rice from more than 20 million tonnes stockpiled this year," said Chookiat.

Greater supply in the world market and bearish demand during the world economic slump will pull down rice prices, he said.

Chookiat said the government's recent decision to sell off large volumes of rice via bidding caused Thai prices to fall.

Before the bidding, Thai rice was quoted at $530 a tonne in the world market. Now it is down to $490 a tonne.

Last year, India suspended rice exports, because of a domestic shortage problem. Burma exported up to 700,000 tonnes of 25-per-cent white rice in the first four months of the year.

Thailand Development Research Institute president Nipon Poapongsakorn told the seminar he, too, believed the rice price would fall gradually until next year.

"The world economic slowdown has meant lower demand for rice. Lower oil prices, which affect crop prices, will also ensure the rice price remains unchanged or decreases slightly in the second half of this year," said Nipon.

However, some factors could actually cause a slight increase in the price, such as increased demand in certain markets. These could include major rice importers Indonesia and the Philippines.

Commerce Ministry permanent secretary Siripol Yodmuangcharoen said not only India would become an important rice-export rival of the Kingdom, but also Pakistan, which is set to export up to 4 million tonnes this year.

Kwanchai Gomez, secretary-general of the Thai Rice Foundation under Royal Patronage, said uncertainty about the rice price would be prolonged as long as development of rice production and quality was delayed.

This will also result in a huge cost burden for farmers.

She said Thailand's rice production must be developed to meet a particular quality and yield per rai.

"Thai farmers have long suffered from low incomes and little management expertise.

"The government must focus on providing knowledge to newer generations, to ensure the development of rice farming, as well as the creation of sustainable incomes to increase the quality of life for rice farmers," she said.

Thai Farmers Association president Prasit Boonchuey said instead of losing more than Bt20 billion in a pledging scheme, the government should consider investing Bt10 billion each year for the sustainable development of rice farming, production and irrigation.

He said rice-price volatility was connected to the world market and middlemen.

Rice farmers have always experienced unpredictable rice prices, even during the pledging scheme. The government must establish a long-term agenda to ensure long-term sustainability in rice trading and prices, Prasit said.

Cambodian rice to flood market soon

2008-12-02
Commodity Online (India)

NEW DELHI: Even as India is shying away from exporting non-Basmati rice fearing inflation rise, Cambodia is all set to play a big role in rice market with a surplus crop helping the country ship at least 2 million tonne.

Media reports said Cambodia’s production of unmilled rice has increased 12 per cent this year, which would create a surplus of 2.8 million tonnes in 2008, up 300,000 tonnes over last year’s figures.

The country also hopes that the quantity of rice production will continue to increase next year.

The Cambodian government expects total production of unmilled rice to hit 6.8 million tonnes, which would represent a million-tonne gain over last year.

Cambodia is negotiating with several countries to secure additional markets for Cambodian rice.

The country will export at least 2 million tonnes of rice in 2009 to countries in the region, in the Middle East, the European Union and in Africa.

Vietnam: Exporters leave harvested rice piling up in fields

Thanh Nien News, August 1

Farmers in the Mekong Delta have almost finished harvesting their summer-fall crop but few have found buyers for all their rice. Nguyen Van Phat, an old farmer in Kien Giang Province, said piles of harvested rice were now left beside the fields, covered by tarpaulins. “Rice is now hard to sell, so no one will steal it.” The situation is a stark contrast to April, when fears of a rice shortage cleared supermarket shelves in Hanoi and Ho Chi Minh City of the food staple. Truong Thanh Phong, chairman of the Vietnam Food Association (VFA), said the world price of rice had dropped sharply, citing that the Vietnamese best type of rice – 5 percent broken – was now sold at $620-630 per ton while the cheapest type – 25 percent broken – used to cost $1,200 per ton. In Chicago, rough-rice futures have fallen 30 percent from a record high in April.

As world grasps for rice, Cambodia's success story

The rice-exporting country has seen a dramatic rebound thanks to years of agricultural research.

May 1, 2008
By David Montero
Correspondent of The Christian Science Monitor

Phnom Penh, Cambodia - For 30 years the rice fields at a commune on the outskirts of Phnom Penh lay mostly barren and unused, a legacy of the Khmer Rouge, the Communist regime that led almost 2 million Cambodians to their death, many from starvation.

But today Cambodia has a rice surplus. And these fields are incubating some of the most advanced rice technology in Cambodia, under the tutelage of the Cambodian Agricultural Research Institute (CARDI), which is at the center of Cambodia's largely unheralded "green" revolution.

As the global food crisis continues to spark riots and rationing, Cambodia's turnaround showcases the power – and the limits – of rice research, experts say. Few countries in modern history have engineered as dramatic an agricultural rebound as Cambodia.

In 10 years, beginning in 1987, by applying the tool suite of the Green Revolution – new rice varieties, improved irrigation, and better fertilizer – the country has risen to a peak of rice output, producing enough rice to be self-sufficient for the first time in 25 years.

"It has been a big achievement for [Cambodia]," says Men Sarom, CARDI's director. "And I think research contributed a lot to that."

The kernel of that research was first planted in the 1960s, when scientists at the International Rice Research Institute (IRRI), a pioneering agricultural institute based in the Philippines, developed higher-yield varieties of grain and introduced new systems of irrigation and fertilizer. Thus was born the Rice Revolution.

Of particular importance was IR8, a rice variety that had a yield double that of normal rice, was less susceptible to disease and more responsive to fertilizer. Dubbed the "miracle rice," it has been credited with averting massive famine in India, Africa, and throughout the developing world in the 1970s.

Cambodia is home to one of the Green Revolution's greatest successes. In 1969, Cambodia's annual rice production was 4 million tons a year, a healthy output. But by 1980, the 6 million people who had survived the Communist Khmer Rouge era, from 1975 to 1978, were on the brink of starvation. By 1997, however, Cambodia had been virtually reborn: its rice fields were producing nearly as much rice as they had in 1969, but on half the land, making the country rice self-sufficient once again.

The rebound was the result of a collaboration between the Cambodian government, the IRRI, and the Australia government, which together invested millions of dollars in irrigation, infrastructure, and fertilizer beginning in 1987. They also trained 1,300 scientists and support staff to revitalize the country's agricultural system. And the new high-yielding rice varieties allowed farmers to produce more on less land.

Today, experts say, Cambodia's yields have risen from 1.35 tons per hectare to 2.5 tons per hectare. It produces enough to export – more than a million tons this year – but recently imposed export controls to ensure it has enough for its own people.

Still, as Cambodia also illustrates, scientific advances will only take rice production so far. Although Cambodia's yields have doubled in the last 30 years, they are only almost half that of Thailand and Laos (where better soil conditions, seed varieties, climate and management make for higher outputs). Meanwhile, weeds here still cause rice yield losses of up to 30 percent, and poor seed quality in some areas means that 160,000 tons of rice rot every year, according to a report by the IRRI.

"There are still many problems that need to be addressed – problems from climate change and market changes," say Mr. Sarom.

Scientists also warn that the amount of land being farmed – especially in the developing world – has not increased substantially in the last two decades. Urban sprawl and industrial development continue to compete for farmland.

"Even here in Thailand [the world's largest exporter of rice], even if they wanted to, they can't produce more rice. There isn't much more farmland, and the production level is also already pretty high," says Paul Risley, a spokesman for the World Food Program in Thailand.

The recent global food crisis has sharply underlined that, despite the Green Revolution's benefits, many countries are simply not able to produce enough food for their exploding populations.

But even if the biggest production advances have already been achieved, that doesn't mean scientists are giving up.

CARDI, continues to develop new varieties that can produce better quality rice and withstand inclement weather. Sarom says research is already pointing the way to higher rice yields. "In America and Australia, you have yields of six to eight tons of rice per hectare. Why not here? We still have the potential to increase productivity," he says.

That enthusiasm was echoed by the country's agriculture minister, Chan Sarun, Tuesday when he said he expects Cambodia to produce enough rice to export some 8 million tons a year by 2015. That would make it one of the world's top rice exporters.

And around the world, research still offers the promise of better yields. For example, hybrid rice, a blend of three kinds of rice, grows faster, is more disease resistant, and produces 20 percent higher yields. Hybrids are only just starting to catch on: 800,000 hectares were planted in Asia outside of China between 2001-02, but only 1,000 in Indonesia, for example, and only 20,000 in Bangladesh, according to the Food and Agricultural Organization of the United Nations (FAO). The expanded use of hybrids has particular promise for food security, the FAO adds.

The current food crisis may be creating an investment environment for a second Green Revolution, some analysts say. By averting massive famine, the first Green Revolution helped create an impression among world leaders that investments in agriculture were no longer as vital. Many countries stopped spending on agricultural development. That may be starting to change as Malaysia, the Philippines, and China have in recent weeks announced plans to boost investment in agriculture.

At last, the Hun Sen regime understands the importance of Khmer "white gold" (rice) export

Rice seller in Phnom Penh (Photo: AP)

Cambodia hopes to export 8 million tons of rice by 2015

Friday, 25 April 2008
Chun Sophal
The Mekong Times

Despite the chaos wreaked in the region by skyrocketing rice prices and concerns over inadequate supplies, Cambodia expects to export 8 million tons of rice by 2015.

Chan Sarun, minister of agriculture, forestry and fisheries, made the claim at an exhibition of natural agricultural products held Thursday in Kompong Tralach district, Kompong Chhnang province.

“We will encourage farmers to crop twice or three times per season and we will further strengthen irrigation systems in order to increase rice production,” he said, stressing the potential of Cambodia’s 3 million hectares of agricultural land.

Yang Saing Koma, executive director of the Cambodian Center for Study and Development in Agriculture (CEDAC), agreed that rice harvests could be boosted.

“Cambodia has vast tracts of land and current rice output is still low. We believe that Cambodia can achieve the goal. I understand that Cambodia could soon become the second or third [largest] rice exporter in the world.But the government must invest more in the agricultural sector so that farmers have resources and techniques to increase rice yields.”

In fact, Yang Saing Koma said the Kingdom could produce up to 10 million tons of rice in the four or five years.

Prime Minister Hun Sen declared Wednesday during the 13th government-private sector forum that Cambodia wants to become the world’s biggest exporter of rice or “white gold” as he referred to it, by 2015. “Rice is like platinum in Cambodian soil,” he claimed. “We must produce rice to do business and sell in markets.”

Cambodia had a surplus of more than 2 million tons of rice from a total harvest of 6.7 million tons in 2007. Around 1.5 million tons was exported.

Chan Sarun stressed that multiple rice crops and new seeds would be needed to boost exports. Cambodian farmers normally plant only one or two rice crops per year because of a lack of irrigation.

A report by the Ministry of Agriculture claimed that Cambodia has only 30 percent of the irrigation systems it needs, though a number of irrigation systems are under construction.

Cambodia has a surplus of 2 million tons of rice for export [to Vietnam mainly]

Monday, December 17, 2007
Rasmei Kampuchea newspaper
Translated from Khmer by Heng Soy

A high ranking government official indicated that based on this year’s estimates, Cambodia has a surplus of about 2 million tons of rice for export.

Chan Sarun, the minister of agriculture, forestry and fishery, told the Cuban No. 1 vice-minister of economy, during a meeting in Phnom Penh last week, that based on the results of the 2007-2008 rice production, Cambodia has a surplus of about 2 million tons of rice for export, after subtracting out the amount of rice needed for consumption and for use as next year’s crop.

Chan Sarun added that, currently, farmers are busy harvesting, and about 40% of the crop has been harvested on 2,241,020 hectares of planted lands. He also told the Cuban minister that, along with the harvest, the farmers are also getting ready to plant dry season rice and other crops.

According to a report from the ministry of agriculture, up until 13 December, Cambodia harvests about 1.87 million tons of rice more that last year. The average rice yield is 2.061 tons per hectare. At the same time, Cambodia also sees along the an export of rice to VietnamCambodian-Vietnamese borders in Romeas Hek border gate, Svay Rieng province. During the second week of rice export to Vietnam, and up until 13 December, the amount of rice export is 935 tons, this is an increase of 186 tons from the previous week. Middle men bought the rice at an average cost of 950 riels (~$0.25) per kilogram.

At the same time, the ministry of agriculture hopes that the 2007-2008 rice production will be better than last year due to a change in attitude of the farmers.