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.