Asian rice prices seen declining in 1999
Asian rice prices seen declining in 1999
SINGAPORE (Dow Jones): Asian rice trade and prices are likely to decline in 1999, as major importers scale down their buying, forcing sellers to reduce prices, according to delegates at a recent industry conference.
Though the decline in trade is expected to be significant, global rice trading volume will still be substantial, they said.
A drop in Indonesia's demand is seen as the main factor pushing down world trade and, along with it, prices in 1999.
World trade in 1999 is forecast to fall between 3 million and 7.0 million tons from the 1998 forecast level of 26.75 million tons, according Tom Slayton of Slayton & Associates in the U.S., publisher of the influential Rice Trader report.
He said Indonesia's massive 6.25 million-ton import requirement for this year could fall to 2 million-4 million tons next year.
Demand from the Philippines, Brazil and Bangladesh is also expected to fall significantly from the high levels reached this year.
The Philippines, whose 1998 imports are put at some 2.2 million tons, could see imports returning to normal levels of 750,000-1.0 million tons in 1999, according to Slayton.
Bangladesh is likely to see its imports shrink to 500,000-1.0 million tons in 1999 from 1.4 million tons this year, while Brazil's 1999 imports are forecast at 750,000-850,000 tons, down from 1.45 million tons this year, he said.
Major exporters this year, meanwhile, will likely be selling less next year. China, which suffered devastating floods a few months ago, is unlikely to repeat its 1998 rice sales of as much as 3.75 million tons next year, traders said.
They were attending the two-day Asia International Rice Conference in Phuket, Thailand, organized by IBC Asia Ltd., which ended Friday.
China's imports, meanwhile, should remain strong owing to natural disasters, a reduction in arable land and new consumer affluence, according to Eastern Strategic Consulting in Hong Kong.
With less competition among buyers and sellers, Asian rice prices are expected to slide in 1999, said rice industry officials.
Slayton mentioned Asian prices could slip to 1997 levels. In 1997, Thai 100%B rice hovered around $270/ton, basis free-on- board.
Current offers for Thai 100%B rice are quoted at $280- $285/ton, FOB, in anticipation of strong new-crop arrivals to market.
Traders said India is likely to remain a major exporter of non-basmati rice in the world market next year.
India's basmati rice exports aren't expected to rise significantly, owing to little production growth. And with less demand expected from the Middle East, India exporters will have to seek new markets in Europe or the U.S., said a senior management official from an Indian basmati rice exporting company.
The following are import forecasts for selected countries from U.S.-based Slayton & Associates, publisher of The Rice Trader report, in thousands of tons:
Country 1997 1998 1999
Low High
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Indonesia 782 6,250 2,000 4,000
Philippines 804 2,200 750 1,000
Bangladesh 43 1,400 500 1,000
Malaysia 649 575 575 650
Sri Lanka 306 175 75 175
Brazil 850 1,450 750 850
Iraq 707 800 800 800
Iran 718 500 500 750
Ivory Coast 511 650 500 650
Nigeria 808 800 700 800
Subtotal 6,178 14,750 7,150 10,675
Others 12,922 12,000 12,850 12,825
Total 19,100 26,750 20,000 23,500