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Rice price to rise on foreign demand
Rice prices are expected to rise by 6-7 percent in coming weeks, driven by a resumption in foreign demand ahead of year-end festivals and lower supply due to climate change, according to CP Intertrade chief operating officer Sumeth Laomoraphorn.
CP Intertrade is a subsidiary of Thailand's largest agribusiness conglomerate Chareoen Pokphand Group (CP Group).
"Foreign purchase orders had already resumed, while more purchase orders from African markets are also likely after Ramadan", Sumeth was quoted as saying in Bangkok Post.
Other contributing factors were the impact from global warming and widespread drought that has led Russia to ban wheat exports, he said.
Hot, dry weather is also expected to cut output and export capacity of Ukraine and other European nations.
In addition, lower output in Latin American countries, particularly Brazil, due to climate change is also expected to lead to an increase in their rice imports.
Golden opportunity
"The second half of the year will represent an opportunity for Thai rice exports, which are expected to reach 8.5-9 million tonnes," said Sumeth. "The country this year has exported 4.9 million tonnes of rice, as of August 18."
Thailand will continue to benefit from India's continued ban on white-rice exports due to widespread drought.
Korbsook Iamsuri, President of the Thai Rice Exporters' Association, said buyers in southern China since May had been purchasing rice from Viet Nam to offset a domestic shortfall.
"If Viet Nam, which has already secured massive advance purchase orders, fails to deliver on its commitments, opportunity will return to our grains," he said.
According to the Viet Nam Food Association, Viet Nam exported nearly 4 million tonnes of rice, attaining export turnover of nearly US$1.94 billion in the first seven months of 2010. Viet Nam, the second-largest exporter after Thailand, expects to export 6.5 million tonnes of rice this year.
The global rice trade is estimated at 30 million tonnes of milled rice for the 2009-10 season, a slight increase of 2.6 per cent from the previous season. Of that, Viet Nam and Thai Lan supply 50 per cent.
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