Asia's rice supply expected to improve

Asia's rice supply expected to improve

SINGAPORE (Reuter): Asia's rice supply crunch is likely to end
by early 1996 on expectations of good harvests in Thailand,
Vietnam and other major producer countries, traders said
yesterday.

Crop woes have forced China, Indonesia, the Philippines,
Bangladesh, Nepal and North Korea to turn to imports, pushing
international prices higher, they added.

But traders polled by Reuters said Asia's rice situation,
worsened by tight supplies in top exporting countries such as
Thailand and Vietnam, was likely to turn around by early 1996
when the new crops are harvested.

"All crops in Asia are expected to be good," one senior
Singapore rice trader said. "Farmers are encouraged by the high
prices. The monsoon is also reasonably good."

Traders said good harvests are expected in Pakistan, India,
Burma, Thailand and Vietnam starting in November.

"We may see some bearish effect on the market from November
onwards," another trader said.

Thai benchmark rice prices are hovering around US$365 a ton
freight on board from Bangkok, up by $15 from 10 days ago. The
benchmark price stood at $255-$266 a ton a year earlier on the
back of strong international demand.

Traders said they felt prices could stay firm at least until
the new crop season.

"Until then, the supply situation is very tight with two large
buyers, Indonesia and China, in the market," a trader at a large
international house said. "I certainly see more upside potential
for the market for the rest of the year."

Floods in China and drought in the Philippines and other
producer countries have cut Asian rice supplies sharply.

China has so far taken at least one million tons of rice from
Vietnam and another 800,000 tons from Thailand. Industry experts
said Beijing could import at least two million tons for the whole
of 1995.

Indonesia, until now self-sufficient in rice, has contracted
nearly one million tons of mainly Indian rice up to November.

But congestion at Indian ports and other problems have
threatened to delay or even cancel some of the outstanding
shipments, traders said.

Some regional traders said China, Indonesia and Bangladesh
have not completed their buying requirements.

"I see them in the market up to the first quarter of next
year," a Bangkok trader said.

Vietnam, a major exporter, has imposed a ban on exports to get
over current shortages. Traders said the ban was not expected to
be lifted until the new crop arrives.

North Korea has turned to Japan and South Korea for rice.

The Philippines has ordered 250,000 tons of rice from
Thailand, China, Vietnam, India and Japan, but only some 35,000
tons have arrived.

Traders in the Philippines said the shipment delay had sent
local prices soaring and sparked demand for Agriculture Secretary
Roberto Sebastian to resign.

Traders said shortages in Asia were unlikely to trigger
imports of U.S. rice due to steep freight charges.