Asia rice exporters see tougher times this year
Asia rice exporters see tougher times this year
BANGKOK (Reuters): Key Asian rice exporters see tougher times
this year as supplies are growing, competition is getting stiffer
and demand from major importer Indonesia may be hit by a new 30
percent tax levied on imports.
This means newer markets may need to be pried open and access
to African and Latin American consumers expanded, exporters said.
"Oversupply is becoming more serious and the world's rice
trade is expected to go on a downtrend," Vorapong Pichpongsa,
past president and member of the Thai Rice Exporters Association,
told Reuters.
His association predicted world rice production this year
would rise to 396 million tons from an initial projection of 391
million tons.
In Thailand, the world's leading exporter, paddy output in the
1999/2000 (March to April) crop year is seen at 23.27 million
tons compared to 22.49 million in the previous year, agriculture
ministry data show.
"But supply could be higher because of adequate water supply
and dry weather," Vorapong said. "I think we will be able to make
exports at six million tons, if we manage to maintain sales to
the main markets all year round."
Despite regional and global market problems, Thai rice
exporters and the commerce ministry expect the country to export
about six million tons this year. Last year Thai exports totaled
6.6 million tons versus 6.3 million in 1998.
Vietnam, another top Asian exporter, had record exports last
year of 4.56 million tons of rice. But local traders said
exporters would have to work harder to achieve similar exports.
Growing export competition from Pakistan and China and the
imposition of import tariffs by Indonesia to bar the influx of
cheap imports would provide incentives for harder work by
exporters, they said.
In Indonesia, traders said the country's total rice imports
were seen falling this year because of the introduction of the
30-percent import tax from Jan. 1.
"I think the tax will reduce imports, but it's hard to tell
how big the cut will be," said one trader in Jakarta.
The U.S. Department of Agriculture has estimated Indonesia's
total rice imports in 1999 would be at 3.6 million tons, up
100,000 tons from its previous estimate.
The USDA said its estimate was based on reports of high
private imports in late 1999 before the tax was imposed.
Some trade sources, however, said this year's imports by
private Indonesian traders and commodity regulator Bulog were
seen much lower at 3.0 million tons.
Striking a note of optimism in a gloomy market, the director
general of Thailand's Government Warehouse Organization, Niphon
Wongtra-ngan, said current low market prices could attract more
buying from some consumers.
The FOB price of 100 percent Thai grade B rice was quoted
about $245-$250 per ton, while five-percent Thai rice was quoted
at $235 per ton.
A year ago, the price of 100 percent grade B rice was quoted
at about $310-$320 and five percent was at about $280 per ton.
Thai Hom Mali (jasmine) rice was quoted at about $410 to $415
per ton, slightly lower than $420 quoted a year ago.
"Prices have been quite stagnant because of the holiday season
but now there should be some upward movement on the back of new
export orders as the world market has returned to normal
trading," said a Karachi-based rice exporter.
India's non-Basmati rice exports were expected to remain dull
in the coming months because of higher prices compared with
Vietnam and Pakistan, Indian exporters said.
"We are outpriced by Vietnam and Pakistan as far as non-
Basmati rice is concerned," said Prem Garg, managing director of
Shivnathrai Harnarayan, a leading exporter.
"Some consignments are going to CIS countries. But overall the
export scene will remain sluggish in the coming months."
Indian rice trade officials expect total rice exports in
1999/2000 (April-March) -- both Basmati and non-Basmati -- to be
lower than last year's level of three million tons.