Rice traders to meet in Bali

Rice traders to meet in Bali

SINGAPORE (Dow Jones): Rice traders and exporters will seek
answers to the slack demand for rice at an annual rice conference
in Bali this week.

The Fifth Asia International Rice Conference, Nov. 8-9,
organized by IBC Asia Ltd., will be held against a backdrop of an
international rice market on the verge of a glut and prolonged
depressed prices, traders said.

"A glut is inevitable with increased domestic production,"
said Rani Teksinghani, chief editor of www.Agribuzz.com, an on-
line trading site for grains based in New Delhi.

"Some of the importing countries have implemented policies
geared towards limiting imports with the aim of protecting local
producers from the low world prices," Teksinghani added.

The offer price of Thai 25 percent broken white rice Tuesday
was at $160-$165 a metric ton, free-on-board, and the lowest
price recorded in the last 10 to 15 years, a Thai rice official
said.

With key buyers such as Indonesia, the Philippines and
Bangladesh holding large rice stocks, participants will keenly
eye forecasts of new demand in 2001, traders said.

Indonesia, the Philippines and Bangladesh were the world's
largest rice importers in 1998.

Bulog is Indonesia's National Logistics Agency with the
responsibility to stabilize domestic rice prices, maintain stocks
and distribute subsidized rice to civil servants, military
personnel and poor households.

Mulyo Sidek, Bulog's deputy chairman for planning and
cooperation, told Dow Jones Newswires Friday, it isn't likely to
import any rice next year.

Sidek will be speaking at the conference on the outlook and
the changing face of the Indonesian rice industry.

Indonesia, he said, is looking to raise import taxes and will
cut down on import permits, when domestic rice supply rises
during the harvesting season, which runs from January to May.

Bulog hasn't been an important buyer since 1998, when it lost
its monopoly to import and distribute rice, sugar and other
staples.

Even so, private traders are likely to import less rice in
2001 too, as disincentives to do so mount. Sidek predicts that
private traders will import around 600,000 tons of rice next
year.

In its latest forecast Oct. 16, the U.S. Department of
Agriculture said Indonesia will remain the world's largest rice
importer this year and the next. The USDA forecasts that
Indonesia will buy 2 million tons in 2000 and 3 million tons in
2001.

But these figures are way below the 6.1 million tons it bought
in 1998, the USDA said. Last year, Indonesia bought 3.9 million
tons of rice.

Middle Eastern countries recently have stepped up rice buying,
traders said. But such purchases from Iraq and Saudi Arabia
aren't enough to make up for the shortfall in demand from
Indonesia, Philippines and Bangladesh.

"This buying isn't enough to compensate for the shortfall from
Indonesia as supply is still decent," said a senior rice trader
with a big European international trading house.

Iran more than doubled its purchases to 1 million tons of rice
last year from 1998. It is projected to buy 1.1 million tons this
year and 1.4 million tons next year, according to the USDA
report.

Rice consumption, however, will increase "only narrowly year
to year," it said. World consumption in 2000-01 is forecast at
401 million tons, up from 1999-2000's 400 million tons.

World rice production for 1999-2000 ended July, rose to 598
million tons from 585 million tons 1998-99, with a projected fall
to 591 million tons in 2000-01, the USDA said.

Looking at these figures, rice prices are likely to continue
declining next year, said Panyapat Taravanit, a senior researcher
at the Thai Farmers' Research Center.

Whether China will export more or less as it becomes a member
of the World Trade Organization is an important issue, especially
to competing rice exporters such as Pakistan and Vietnam.

The USDA said China will export 3.2 million tons this year,
and 3.4 million tons in 2001.

With China quoting its 25 percent broken rice at $145 a ton,
free-on-board basis, compared with the Pakistani variety at
$155/ton, FOB basis, Pakistan's rice exports in 2001 are likely
to continue facing pressure from China, said H.A. Majid, managing
director of Karachi-based Commodity Links International, an
exporter of the Irri-6 rice.

Pakistan is the world's fourth largest rice exporter this
year, after Thailand, Vietnam and China.