Monday, May 12, 2008

Thailand To Provide Emergency Rice Supplies To Malaysia

Malaysian Rice Being Smuggled Into Thailand (A month ago)

"This has never happened before, our rice being smuggled into Thailand,"

Thailand is the world's biggest rice exporter and its rice makes up 60 per cent of Malaysia's imports. Malaysia imports 650,000-700,000 tonnes of rice a year to satisfy its yearly needs of more than 2 million tonnes.

The rising price of rice in the global market has prompted discussions on food security, efforts to grow more rice, measures to stem rice smuggling and restrictions on conversion of agricultural land for other use.

Malaysian government gives subsidy on rice -it's now cheaper to buy Thai Jasmine rice in Malaysia then in Thailand - believe it or not!

A month later (current)

The Thailand government has announced its plans to supply a total of 500,000 MT of emergency rice supplies to Malaysia in three days.

The Malaysian government had earlier asked for help from the Thai government, as its rice stocks were sufficient only for 15 days, and the request was aimed at preventing domestic shortages.

According to industry experts, global rice supplies may never return to the earlier comfortable levels due to the strong global demand and limit to the production growth.

A recent report also confirmed the above view by predicting that global 2007-08 rice production is forecast at a record 423 million MT, while demand is projected at a record 424 million MT.

The International Grains Council in its recent report has predicted that the global trade in rice is projected to rise 2.1% in the current year to reach 29.4 million MT.

South Asia's requirements in 2008 are also projected to be 60% higher at 1.6 million MT, reflecting strong demand from Bangladesh following cyclone damage to paddy fields in late 2007.

Thai rice exports are forecast to decline by 8.4% this year to 8.7 million MT due to depleted state reserves. Thai 100% grade B was offered steady last Friday at $945-$1,000 PMT, FOB, 5% broken at $880-$980 PMT, FOB, and parboiled at $992-$1,025 PMT, FOB.

The Thai Government is asking for US$ 1,000 /ton for an immediate shipment of 200,000 metric ton.

Why did the Malaysia Government waited for more than a month in placing their order requirement now...they could have made the purchase early last month at only $500/ton or less 50% the price now?

Rice Price Increase (last month)

Thailand will expect a further surge of rice price in near future as global demand for the staple grain continue rising in face of a food shortage crisis in some countries.

Thailand's Deputy Prime Minister and Commerce Minister Mingkwan Saengsuwan on Friday projected the export price of the Thai jasmine rice or fragrant rice would double, reaching 30,000 baht (some 968 U.S. dollars) per ton in the next quarter from the present 15,000 baht (484 dollars) per ton, if the ongoing global food crisis persists.