July 14, 2008

 

Asia Grain Outlook on Monday: Rice may rise more as thai government buys paddy

 

 

Asian rice prices are expected to keep rising in the week ahead, continuing the bounce in prices over the past few days.

 

A trader in Bangkok said since the government is buying paddy from farmers at an intervention price of THB14,000 a metric tonne (US$420), it has led to a floor price of sorts for export prices too, with exporters unwilling to sell grade B rice below US$735/tonne.

 

"As I see it, prices have some more room to rise this week, after which there could be some downward correction, as there's not much export demand," the trader said.

 

Traders said export inquiries from the Philippines have mostly dried up, though Nigeria continues to be an active buyer of parboiled rice.

 

India had been Africa's major supplier of parboiled rice in the past, but its continued ban on basmati rice exports has resulted in a strong demand for Thai parboiled rice exports.

 

Meanwhile, India is likely to reconsider the ban on rice exports once the rice harvest concludes in October or November, G.K. Pillai, India's commerce secretary, told reporters last week.

 

"If we (India) have a production of 94 million tonnes, we may have 3-4 million tonnes of surplus rice, which would then be available for exports," he said.

 

India's rice crop is currently being sown. The government is expecting a bumper harvest in the fall.

 

In other grains, Taiwan Sugar Corporation last week bought 29,000 tonnes of U.S. corn in a tender, while China's state-run grains trading firm Cofco said it may export up to 50,000 tonnes of corn to Taiwan.

 

This is part of a 200,000-tonne corn export quota to Taiwan for 2008 approved by China earlier this year, said Gu Lifeng, general manager of Cofco's corn department.

 

Cofco has exported 25,000 tonnes of corn to Taiwan so far this year. It has also exported 50,000 tonnes of corn to North Korea this year in exchange for other goods, Gu added.