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.