July 22, 2009
Asia Grain Outlook on Wednesday: Rice price outlook firm; India monsoon, CBOT
Rice prices are likely to stay firm in Asia in coming sessions, supported by bullish bellwether Chicago Board of Trade futures, while a disappointing start to India's monsoon season could also provide a catalyst to push the market higher, participants said.
In Asian trading Wednesday, rice futures on e-CBOT rebounded from a dip Tuesday in U.S. trade, with the September contract up 10 U.S. cents at US$13.43 a hundredweight at 0720 GMT, despite declines in other CBOT grains.
In the June 1 to July 18 period, India's annual rains were 23% below normal levels, with north and northwestern regions the worst hit.
Though the focus in the days and weeks ahead will stay on the progression of India's monsoon, observers said the market will also be watching for signs that the country will lift an export ban on rice, which has been in place since 2008.
According to data released Tuesday by the federal government, India's 2008-2009 rice output is expected to reach 99.15 million tonnes, while the world's biggest rice exporter, Thailand, is expected to start releasing rice from a 6 million to 7 million tonne rice stockpile as early as this week, encouraged by favorable global prices.
"The full details (of Thailand's stock release) are still not that clear, but the government has said it will start releasing stocks as early as this week. But it's Wednesday already, so it will more likely be next week," said Chookiat Ophaswongse, president of the Rice Exporters Association of Thailand.
"It's a good time to sell paddy and milled rice, but not white rice, as Vietnam is still too competitive," he said.
Chookiat also said the government will likely initially release around 600,000 tonnes of paddy to the private sector, as prices and demand for parboiled rice are relatively favorable, due mainly to India's export ban.
Meanwhile, the Philippines is expected to buy 75,000 tonnes of rice from Thailand and Pakistan based on price offers submitted at a tender Wednesday for shipment between August and September, the state grain agency the National Food Authority said.
In other regional grains news, Japan's Agriculture Ministry said it is seeking 108,000 tonnes of U.S. and Australian wheat in its regular tender, which was issued Tuesday and due to be concluded Thursday.
