Rice price hits new high on global markets
Local traders to ease impact, but warn of increases ahead
Straits Times 25 Apr 08;
BANGKOK - THE prices of rice in Thailand, the world's top exporter, surged to a record high above US$1,000 (S$1,360) a tonne yesterday as fears of a global shortage spread as far as the United States.
Thai 100 per cent B grade white rice, the world's benchmark for global trade, was quoted in a range of US$1,000 to US$1,080 per tonne.
This week's 5 per cent jump takes prices to nearly three times their level at the start of the year.
Rice futures in Chicago also rose above US$25 per 45kg on Wednesday, but eased slightly in early trading yesterday.
The price surge, which started when India imposed export curbs last year and has since led to shortages and riots from Egypt to Haiti, has made its way to US shores.
Americans have been cleaning out the shelves at major retailers including Wal-Mart's Sam's Club and Costco Wholesale Corp.
On Wednesday, Sam's Club said customers could buy only four 9kg bags of jasmine, basmati and long-grain white rice per visit. Its rival Costco has already limited customers to two bags of rice a day at some of its stores.
'It is like a run on the bank. We don't think there is a shortage; it is just increased shopping by customers who think there is,' said Costco's chief financial officer, Mr Richard Galanti.
But the upward surge of rice prices shows no sign of abating. In Bangkok, some traders said Thai 100 per cent B grade white rice could hit US$1,300 a tonne due to unsated demand from the No. 1 importer, the Philippines.
Pressure on supplies and prices increased on Wednesday, when Brazil became the latest country to suspend rice exports, following in the footsteps of India and Vietnam.
But Thailand, which accounts for nearly a third of all rice traded globally, has said it will not impose any curbs. Yesterday, a Thai government spokesman reiterated that the country will meet all export commitments.
Mr Wichianchot Sukchotrat was speaking in Kuala Lumpur, where Thai Prime Minister Samak Sundaravej met Malaysian leaders, during which food security was a key topic of discussion.
'We don't need to restrict Thai exports because in the next few months, a new crop will come out,' the spokesman said.
In Singapore, where most rice imports come from Thailand, importers say it is getting more difficult to hold back on price increases given the more frequent, and steeper, price jumps in global markets.
Singapore's biggest supermarket chain, NTUC FairPrice, said it will moderate price increases and stagger them to soften the impact on consumers.
Said its spokesman: 'Our current rice stockpile was secured at a lower price a few months ago. Going forward, we have to import rice at prevailing market rates which have increased by more than 100 per cent since March last year.'
The Government has highlighted three measures to help the needy: bigger and earlier payouts for those on the Public Assistance Scheme; two instalments of Growth Dividends; and targeted help from the citizens consultative committees (CCCs).
Most of the CCCs that spoke to The Straits Times said there was an increase in the number of people approaching them for help.
REUTERS, ASSOCIATED PRESS, LOS ANGELES TIMES
ADDITIONAL REPORTING BY JESSICA LIM AND MELISSA SIM IN SINGAPORE
Rice climbs to record; Wal-Mart restricts purchases
Business Times 25 Apr 08;
(NEW YORK) Rice advanced above US$25 for 100 pounds for the first time yesterday as Wal-Mart Stores Inc's Sam's Club warehouse unit restricted purchases of some types of rice in the United States.
The cereal, the staple food for half the world, has more than doubled in price in the past year as China, Vietnam and India curbed exports to safeguard domestic supplies. Sam's Club limited customers to four bags of jasmine, basmati and long-grain white rice per visit in all US stores where allowed by law, company spokeswoman Kristy Reed said by e-mail.
Consumers have started hoarding rice as supplies shrink. Thailand, which ships one third of the world's exports, may restrict sales, a World Bank official said this week. Wheat, corn and soybeans gained to records this year, spurring social unrest in countries including Haiti and Egypt.
'We have been neglecting our basic rice production infrastructure and research and development for 15 years,' said Robert Zeigler, director-general of the International Rice Research Institute in the Philippines. 'National hoarding really doesn't help the market,' he told Bloomberg Television.
Rice rose as much as 0.9 per cent to US$25.01 per 100 pounds in Chicago yesterday and has climbed 26 per cent this month, heading for its biggest monthly gain since October 1993.
The US warehouse clubs are trying to protect business customers, like smaller restaurants, caterers, nursing homes and day-care centres, said Jim Degen, principal of JM Degen & Co, a food industry advisory firm based in Templeton, California.
UN Secretary-General Ban Ki Moon said last weekend that rising food costs may hurt economic growth and threaten political security. The World Bank has forecast that 33 nations from Mexico to Yemen may face social unrest because of higher food and energy costs.
Brazil may also curb exports of rice to build domestic inventories, Agriculture Minister Reinhold Stephanes said in Brasilia on Wednesday. -- Bloomberg
Thai rice at new high of US$1,000 a tonne
M'sia wants Thais to fill its orders for 480,000 tonnes of rice this year
Business Times 25 Apr 08;
(BANGKOK) Prices of benchmark Thai rice leapt more than 5 per cent to a record high of above US$1,000 a tonne yesterday, and traders in the world's top exporter warned of further gains if buyers Iran and Indonesia step into the market.
Prices have now nearly trebled since around US$383 in early January, sparking food riots in African countries and Haiti and adding to growing fears that millions of the world's poor may soon struggle to feed themselves.
Thailand's 100 per cent B grade white rice, the world's main physical benchmark for global trade, was quoted in a range of US$1,000 to US$1,080 per tonne free on board, up from around US$950 per tonne last week, according to a Reuters poll of five traders.
This year rice finally joined in a global rally in food crop prices amid a surge in demand from major importers who feared that export restrictions by key suppliers like Vietnam might leave them short, especially with global stocks having halved since touching a record high in 2001.
Some analysts say the sense of panic should subside as stocks rebuild and new crops reach the market, although sellers in Thailand remained bullish on the hope that other buyers would soon join Manila in topping up domestic stockpiles.
'Some exporters may quote a price higher than US$1,000 a tonne if their costs are higher. Supply is still tight,' Chookiat Ophaswongse, head of Thailand's Rice Exporters Association, told Reuters.
'If the Philippines agrees to buy all of the rice offered at the tender last week, prices will go much higher,' Mr Chookiat said.
At a tender in Manila, traders offered only 325,750 tonnes of rice, falling short of a requirement of 500,000 tonnes.
Traders said Manila may have to increase the volume it is seeking to buy in a May 5 tender by 100,000 tonnes to 600,000 tonnes.
Iran and Indonesia, which traditionally each buy around one million tonnes of rice a year, have avoided Thai rice this year due to high prices. But traders said they may jump into the market soon.
'If Iran buys rice from Thailand, Thai 100 per cent B grade white rice would hit US$1,300 a tonne,' one exporter said.
The Rice Exporters Association, which sets a weekly notional floor price based on the median of trade, raised its recommended price for 100 per cent B grade white rice to US$894 per tonne on Wednesday, up from US$854 per tonne last week.
Malaysia was to urge Thailand to fill its orders for 480,000 tonnes of rice this year at the two nations' prime ministers' meeting yesterday, Malaysian Foreign Minister Rais Yatim said.
'Food will be discussed, rice being our staple food,' Mr Rais told reporters ahead of a meeting between Malaysian premier Abdullah Ahmad Badawi and visiting Thai Prime Minister Samak Sundaravej.
Malaysia, which imports 650,000-700,000 tonnes of rice a year to satisfy annual needs of more than two million tonnes, announced plans at the weekend to open up large-scale rice farming and boost irrigation to meet growing demand and cut imports. -- Reuters
