May 14, 2008
Asia Grain Outlook on Wednesday: Rice prices may fall on Asian harvests
Rice prices may continue to fall during the remainder of the week on increased supply as Asian rice harvests near a conclusion.
Asia's second largest rice exporter Vietnam saw rice export prices drop 10% over the week as farmers started harvesting the new rice crop.
Traders said exporters are waiting for prices to fall even more as harvesting picks up pace. Vietnam expects to export 1.8 million metric tonnes of rice between June and September.
Meanwhile, Malaysia is keen on keeping domestic rice prices stable and is likely to receive 50,000 tonnes of Thai rice in the next two weeks, with another 150,000 tonnes likely to arrive by end-June.
The Malaysian government is seeking to build a rice stockpile of 500,000 tonnes, though it still hasn't decided when or from which origin it will buy the remaining 300,000 tonnes.
According to Malaysia's local news agency Bernama, Malaysia's plan to buy 500,000 tonnes rice at once couldn't be realized, as the Thai exporters sought US$1,000/tonne while Malaysians were only willing to pay US$850/tonne.
Malaysia is now also considering barter arrangements with countries willing to export rice in exchange for Malaysian palm oil.
In other rice news, devastation of Myanmar's key rice-growing region by cyclone Nargis is likely to reduce national rice production and require imports from neighboring countries, pressuring already high global prices, the United Nations' Food and Agricultural Organization said Monday.
The FAO added that prices of rice in Myanmar's capital Yangon have surged by 50% since the cyclone.
In other grains, corn futures on the Chicago Board of Trade are now almost completely under the sway of weather.
Tuesday, clearer weather in corn growing areas of the U.S. pushed futures lower.
But corn futures will continue to be supported by a bullish overtone in the next several months, as corn acreage in the U.S. is expected to drop sharply, ceding acreage to soybeans.
