Thailand: Dry spell, pests threaten crop
Nirmal Ghosh, Straits Times 6 Mar 10;
BANGKOK: Dry weather made worse by El Nino, combined with invasions by mice and plant hoppers, could cut Thailand's rice crop and push up prices later this year.
But rice prices remain low for the moment. The government still has more than 5.5 million tonnes of rice stockpiled and seems unwilling to sell it to exporters at a loss, experts told The Straits Times.
This month, the government plans to try again to sell some 300,000 tonnes of its stockpiled rice. Two tenders have already been floated but were cancelled because the prices offered were too low.
As in many other Asian countries, rice production and pricing is a major economic and political issue. For Thailand, it is a balancing act; having bought the stockpiled rice from farmers more than a year ago, the government now finds that it cannot recoup the investment because the price has since fallen.
But it must also keep procuring rice to ensure that farmers are not hit by low prices. In fact, it plans to buy an additional 290,000 tonnes from farmers to shore up prices, Deputy Prime Minister Trairong Suwannakhiri said last week.
Production could be hit if the drought persists and is made worse by climate change-related factors such as irregular rainfall and long hot spells.
Last month, Thailand's Office of Agricultural Economics predicted a decline of 15 per cent in the rough rice harvest to 27 million tonnes in the year that began last October.
This was blamed on El Nino - the weather phenomenon caused by a warming of the equatorial Pacific Ocean - which will reduce rainfall.
Already, several districts of Chiang Rai province in the north have been hit by drought, and the Mekong River is at its lowest level in 20 years, grounding much of the river transport.
On Feb 26, the Vientiane-based inter-governmental Mekong River Commission warned that 'severe drought will have an impact on agriculture, food security, access to clean water and river transport, and will affect... economic development.'
An exporter, who asked not to be named, said he did not expect rice prices to rise over the next three months. Thai rice export prices have been falling in recent weeks and are now around US$555 (S$777) a tonne.
Across South-east Asia and especially in Vietnam, recent rice harvests have been good and supply has not been an issue.
The only short-term uncertainty is whether Indonesia will enter the market to buy Thai rice, Thai exporters say.
Malaysia, Bangladesh and the Philippines are the other three major buyers in the region, and demand from them has already been factored into prices.
Major orders are also still to come in from African and some Middle Eastern countries.
But exporters say the price of rice will still remain well below the peak in 2008 when - in what some experts said was an 'aberration' that some blamed on speculators - prices hit an all-time record of around US$1,000 a tonne.
Philippines: Record imports likely
Alastair McIndoe, Straits Times 6 Mar 10;
MANILA: The Philippine government may import more rice than planned this year, as an unusually severe dry spell caused by the El Nino weather pattern deepens a local production shortfall.
The Philippines is already the world's biggest importer of the grain.
National Food Authority (NFA) spokesman Rex Estoperez said the agency is considering raising the rice quota on imports by private firms to ensure that supplies are sufficient.
This, combined with the NFA's own shipments, could see the Philippines importing a record 2.6 million tonnes of rice this year.
'We'll make that decision after studying an inter-agency report due later this month assessing the crop damage from El Nino,' Mr Estoperez told The Straits Times on Wednesday.
The El Nino weather pattern is expected to last until June, but climatologists say its impact will probably be felt well beyond the middle of the year.
A blistering heatwave has already caused dams, reservoirs and rivers supplying water for farm irrigation to fall to critical levels in parts of the Philippines.
There has been no rainfall since December in some food-basket provinces. Some farmers in parched rice-growing areas plan to raise less thirsty crops, such as eggplant and squash, in the planting season between May and June.
It was only late last year that devastating floods hit the northern Philippines, destroying 1.3 million tonnes of padi rice.
With prices quite soft at the moment, now is a good time to import rice.
The NFA late last year signed contracts for the import of 2.25 million tonnes of rice - mostly from Vietnam - for delivery this year. But more may be needed.
If the NFA grants approval, private firms may import up to 150,000 tonnes of rice above their quota of 200,000 tonnes this year. The previous record of rice imports was 2.3 million tonnes in 2008, when rice prices surged on supply fears.
The Philippines imports rice because of three factors, said senior researcher Piedad Moya of the International Rice Research Institute. 'There is a limited land area, a lack of large river deltas supplying irrigation water, and a continually increasing demand for rice by a large and increasing population.'
The country imports about 10 per cent of its yearly rice needs to make up for production shortfalls at home. That could be reduced by increasing rice yields using new grain varieties and improving irrigation infrastructure, said Ms Moya.
Storm damage caused rice production last year to fall 3 per cent to 16.2 million tonnes. The latest estimate by the Department of Agriculture, made early last month, is that 800,000 tonnes of padi rice worth 12 billion pesos (S$364 million) could be lost in the sweltering El Nino.
As a result, the local authorities are already rushing to lend water pumps to farmers to irrigate their land, dig wells and induce rain through cloud seeding.
