Already on downtrend, prices will drop to lowest since Feb
Jessica Lim, Straits Times 27 Sep 08;
A FLOOD of Thai fragrant rice into the market will make the staple cheaper next month.
Thai rice exporters anticipate selling grain at about US$790 (S$1,124) a tonne then, marking the first time it has gone below the US$800 mark since February.
The price of rice has been on a downtrend since June. It is now being sold abroad at about US$880 per tonne, a 25 per cent drop from three months ago.
This is still higher than the US$573 tagged onto a tonne of premium-grade Thai rice in September last year.
The current price will fall further because of new crops that will be harvested late next month, which will add to the already swelling global supply.
The Thai Rice Exporter's Association predicts that world supply of the grain will surge by eight million tonnes next year.
The president of the Bangkok-based association said supply would be boosted by countries such as Vietnam and India lifting export bans, and farmers all over the world harvesting grain sown at the start of the year when prices were sky high.
'Prices will drop by at least 10 per cent when the new harvest comes in,' said Mr Chookiat Ophaswongse.
'This also means weakened demand for the Thai staple as buyers now have more sources to turn to,' he added.
Here in Singapore, four major supermarket chains have cut prices of their house-brand rice by 5 to 23 per cent over the past three months.
Supermarkets are monitoring the global prices and conducting price surveys to ensure that their prices remain competitive.
Said an NTUC FairPrice spokesman: 'We are monitoring the situation and will be the first to drop prices when appropriate.'
In the meantime, rice prices are also experiencing a temporary drop due to a fall in sales of Thai rice to the Middle East during the month of Ramadan.
Traders said the Middle East is likely to resume buying early next month.
