At least 8.5 million rai of rice fields, which can produce 4 million to 5 million tonnes of paddy rice, have already been destroyed by flooding, according to the Commerce Ministry.
The harvest loss is expected to gradually push up the price of Thai rice this year.
Permanent secretary Yanyong Phuangrach said yesterday that the flooding would cause the main rice crop to miss the forecast of 24-25 million tonnes. Both the domestic and export prices of Thai rice will increase gradually.
Despite the lower supply of rice, the ministry insists that it will go ahead with the launch of the pledging project for the main crop on Friday as planned.
Rice farmers affected by flooding will receive compensation at Bt3,659 per rai, up from the earlier rate of Bt2,222, when the budget was raised last week.
According to the ministry's preliminary report, more than 5 million rai of other crops in 55 provinces have also been washed out.
That includes about 4,000 rai of cassava, 3,200 rai of rubber and 100,138 rai of vegetable and fruit plantations. The remaining areas grow other field crops.
The flooding has also devastated 7,408 fish farms and 33,585 livestock farms
Myanmar back in the world rice trade after long hiatus
Yangon - Myanmar, plagued for decades by government interference in its rice industry, aims to increase its rice exports to 1 million tons this fiscal year, helped by Thailand's price support programme that promises to make the Thai crop less competitive on the world market.
'Our rice is the cheapest in the world,' said Myo Thuya Aye, managing director of the Ayeyar Wun Trading Co.
'Myanmar rice is 50 to 60 dollars cheaper [per ton] than Thai rice, 40 to 50 dollars cheaper than Vietnamese rice and 30 to 40 dollars cheaper than Pakistan's,' Myo Thuya Aye said.
The price differential is seen as a way for the country to nearly double the exports of 570,000 tons it saw in the past fiscal year, which ended March 30.
Last year's low number was largely because the then-ruling military junta was worried about domestic rice prices.
'That was an election year, so the government and the rice association had to consider price stability,' Myo Thuya Aye said.
Myanmar held its first general election in 20 years on November 7, ushering in a government led by the Union Solidarity and Development Party, which is packed with former military men.
Myanmar's new president, former general Thein Sein, has implemented some policies beneficial for Myanmar's private sector, such as dropping an 8-per-cent export tax on rice and 14 other goods in August.
In the first half of this fiscal year, Myanmar shipped an estimated 370,000 tons of rice to markets such as West Africa, Bangladesh and the Philippines. Shipments should rise for the rest of the year, and Myo Thuya Aye said traders hope to export 1 million tons for the entire fiscal year.
'For years, no other country has had an export tax on rice,' said Sein Win Hlaing, chairman of the Myanmar Paddy Producers Association. 'We have been suffering for a long time.'
Myanmar's rice traders have actually been suffering for as much as six decades.
Prior to World War II, Myanmar was the world's leading rice exporter, shipping an average of 3 million tons a year from the Irrawaddy Delta, the country's rice bowl.
Myanmar's first post-independence president, socialist-leaning U Nu (1949-1962), put rice exports under government control, limiting the private sector to the domestic trade.
When military strongman Ne Win seized power in 1962, he nationalized the entire rice industry - exports and domestic trade, mills and warehouses.
Thereafter, Thailand swiftly replaced Myanmar as the world's top exporter, a position it has held for almost four decades but is now in danger of losing.
Thailand exported about 10 million tons of rice in 2010 and is expected to reach a similar level this year.
But nobody knows how Thailand's rice exports will fare in 2012 after the government on Friday introduces a price guarantee scheme for Thai rice farmers.
Under the programme, which was expected to be discussed when Thai Prime Minister Yingluck Shinawatra visits Myanmar Wednesday, the government is to pay farmers 500 dollars per ton of plain white rice, regardless of the prevailing market price, and 666 dollars for jasmine rice, the fragrant grain Thailand is famed for.
The price guarantees, designed to win votes for the Pheu Thai Party in Thailand's July 3 general election, which it won, is expected to boost Thai rice prices by 40 per cent on the world market.
'It will create a lot of opportunities for other people to come in,' said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.
The Thai move towards government intervention comes just as Myanmar is lifting decades of constraints on its own private sector.
The process began before the current government came to power.
In 2003, the junta allowed private businesses to get involved in rice exports, an activity previously monopolized by the State Agricultural Marketing Board.
In 2009, a year after Cyclone Nargis devastated the Irrawaddy Delta, the government allowed the establishment of 39 'rice specialist' companies to provide farmers with low-interest loans to purchase fertilizers, pesticides and rice seeds.
Besides waiving the export tax on rice exports, a waiver that is to be reconsidered in February, the new government has also allowed the Myanmar rice association to elect its own board and determine rice export quotas on a monthly basis.
Crops Down, Rice Price Crawls Up
Reduced harvests in some areas in Indonesia caused the decline in rice production.
VIVAnews – The Trade Ministry of Indonesia said the rice price hike recently was induced by reduced harvests in some regions. This conditions led to the decline in production.
"Only a few areas are still in production, but sporadically," said Trade Ministry Director of Domestic Trade, Gunaryo, at the Trade Ministry office, Jakarta, Friday.
In addition, Gunaryo continued, when the supply is limited, the high demands of State Logistics Agency (Bulog) and entrepreneurs contributed to the high prices. Bulog, as assigned, must absorb the rice and increase the stocks. "They're vying for rice, so the prices at the consumer level rose," he said.
The output of the grand harvest up to May was projected to come at 60 percent of the total production target of 70.6 million tons of dry milled grain. At the end of the year, there is only ‘gadu’ harvest (dry season crop), so the results are less.
Gunaryo also confirmed that the price hike was not caused by the canceled sale of Thai rice. "I have not seen that it will have an effect," he said.
Based on data of the Trade Ministry, to date, the price of medium rice on national level on average in September is Rp7,472 per kilogram. It was only an increase of 0.69 percent compared to last month.
However, in some cities the rice price hikes are quite high, for example, in Surabaya. The price of rice in September reached Rp8,201 per kilogram. The price went up 3.66 percent compared to last month.
Meanwhile, the rising price of rice in Yogyakarta reached 5.33 percent. However, the price of rice in the area is only Rp7.498 per kilogram.
The government, Gunaryo continued, also continued monitoring the price of rice that began to crawl up, for example Bulog must perform market operations.
"When stocks are good, they can be directly allocated to areas whose warehouse is empty. Hopefully, if the price increases slowly, it can be reported to the regional government immediately and market operations can be performed," he said.
Until two weeks ago, said Gunaryo, the market operations had channeled as many as 80,000 tons of rice, 50 percent medium rice and the remaining was premium rice.
"So now the market operation cannot only rely on medium rice, because some locations have premium rice shortage," said Gunaryo.
Thai rice price set to soar
Phila Siu
Friday, September 23, 2011
The price of rice imported from Thailand may rise by as much as 30 percent from next month, traders warn.
This is because Thailand's new prime minister Yingluck Shinawatra promised to raise the income of farmers by buying rice from them at well above market prices.
Hong Kong Federation of Restaurants and Related Trades chairman Wong Ka-wo said the price of Thai rice has already risen by more than 10 percent over the past few months and he expects a further 30 percent increase as a result of Yingluck's rice policy.
"Some restaurants are already charging HK$1 or HK$2 more for each bowl of rice," he said.
In her election campaign, Yingluck, who took office last month as the country's first woman premier, promised to buy a tonne of paddy rice at 15,000 baht (HK$3,800), and 20,000 baht per tonne of jasmine rice - 5,000 baht more than what the previous government paid.
Before her policy was announced, the wholesale price of Thai rice was 13,000 baht a tonne in June. The price climbed to 17,000 baht this month.
Thai media reported that farmers are hoarding their rice and waiting to sell when the new scheme starts.
Wong said one solution for Hong Kong would be to import more rice from Vietnam and the mainland, as it is cheaper. "With inflation worsening, people will have to dig deeper into their pockets to buy rice," he said.
A rice retailer, surnamed Wong, also said the prices of Thai rice had risen by around 10 percent recently.
He said he knew the hike was coming but did not expect it so soon.
"I thought the effect will kick in around December but the price started to go up since last week."
According to figures from the US Department of Agriculture, Thailand's rice exports last year accounted for 32 percent of global exports. Indonesia is the next with 19 percent.
Thailand's jasmine rice, famous for its soft texture and fragrance, used to have 90 percent of Hong Kong's market share. This fell to about 80 percent in 2009 and 60 percent this year because of the strong Thai baht and the weak Hong Kong dollar.
Meanwhile, Census and Statistics Department figures released yesterday show that food prices last month rose 11.7 percent year on year.
Yingluck's Puea Thai party came to power in the July 3 election with a list of promises including the rice policy, dealing a blow to the ruling Democratic Party.
She then formed a rice price committee in a bid to get public support
Vietnam rice prices jump to near three-yr high
Vietnam's rice export prices rose nearly 1 percent on Thursday, with the 5 percent broken grade hitting $575 a ton and is heading towards $580, which is the highest in more than three years, on demand from Indonesia and Mekong Delta flooding impact, traders said.
They said the loading demand of 400,000 tons for Indonesia, an outstanding Indonesian tender for 100,000 tons and rising flood waters in the Delta that have curbed operation of rice mills and raised production costs, caused prices to rise.
Seasonal floods this year in Vietnam's Mekong Delta are worsening, with waters rising to the highest level in 10 years.
"The news (of possible demand) from the Philippines could also help lift prices while the stocks in Vietnam are no longer ample," a trader in Ho Chi Minh City said.
The head of the Philippines' grain procurement agency said on Thursday he was worried about the damage to rice crops by Typhoon Nesat and could not rule out the need to import rice soon to replenish reserves.
Vietnam. Over 5.8 mln tonnes of rice exported in three quarters
They said the loading demand of 400,000 tons for Indonesia, an outstanding Indonesian tender for 100,000 tons and rising flood waters in the Delta that have curbed operation of rice mills and raised production costs, caused prices to rise.
Seasonal floods this year in Vietnam's Mekong Delta are worsening, with waters rising to the highest level in 10 years.
"The news (of possible demand) from the Philippines could also help lift prices while the stocks in Vietnam are no longer ample," a trader in Ho Chi Minh City said.
The head of the Philippines' grain procurement agency said on Thursday he was worried about the damage to rice crops by Typhoon Nesat and could not rule out the need to import rice soon to replenish reserves.
Vietnamese businesses shipped more than 5.8 million tonnes of rice worth over US$2.8 billion in the past nine months of this year.
Last month the country exported 560,020 tonnes to earn US$291.5 million, according to the Vietnam Food Association (VFA).
Vietnam’s rice export markets continue to be expanded as some Southeast Asian nations are importing large volumes of Vietnamese rice, said Deputy Minister of Industry and Trade Nguyen Thanh Bien on October 4.
The country expects to export 7 million tonnes of rice this year, the highest volume for a year so far
