Thai rice prices set to rise from $550 to $800 a tonne. Vietnam's exports skyrocketing. India's rice $150 cheaper after lifting rice export ban.
Map above shows concentration of world rice production in Asia (Source: Wikipedia)
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RICE TRADE: Summit between top two exporters meant to smooth shipments by Walailak Keeratipipatpong
Thailand and Vietnam, the world's two biggest rice exporters, will hold talks today on future trade arrangements and the effects from the Thai government's revival of the crop mortgage scheme.
The high pledging prices offered in Thailand have increased Vietnam's prices, even as its export volume is expected to reach a 10-year high of 7.5 million tonnes this year.
"We presume that all roads will lead to Vietnam next year, so are there any measures for [Vietnam] to cool down rice sales if they are too active?" asked Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.
The Thai association and the Vietnam Food Association (VinaFood) have cooperated since 2006 by exchanging information on output, exports and selling prices on a weekly basis.
Their annual meeting will be held in Chiang Mai today. Global conditions and pacts such as the implementation of Asean Economic Community in 2015 are among the topics.
VinaFood reported last month that its total paddy output this year would improve to 41.01 million tonnes, a 2.6% rise from the previous season. The increase ensures exports will rise to 7.5 million tonnes, up 1 million from 2010 and likely to be even larger next year.
Thailand and Vietnam control about half of the world's rice trade, which will likely be 31.85 million tonnes in 2012, down from 32.74 million as estimated by the US Department of Agriculture.
The decrease stems from falling Thai shipments to 7-8 million tonnes of rice next year, down from more than 10 million tonnes expected in 2011, as a result of the mortgage plan.
The Thai government's pledging plan aims to pay 15,000 baht a tonne for paddy rice and 20,000 baht a tonne for Hom Mali rice, pushing up export prices to more than US$800 a tonne from $550-560 a tonne for white rice now, which will put a big dent in Thai competitiveness.
Thai rice prices will likely level off a few months after the scheme when other countries harvest their crop
"When the new crop from Vietnam is harvested between February to March, it could affect the sale of mortgaged rice," Mr Chookiat said.
Thailand also faces a challenge from India, as it announced it would lift a rice export ban with a projection to ship out 2 million tonnes of parboiled rice at attractive prices. India's prices were $470 a tonne this week, about $150 a tonne cheaper than Thai rice.
Even Thailand's famed fragrant jasmine rice is not free from competition. Vietnam's continued investment in research and development has improved this strain of grain.
"It's a big threat to Thai Hom Mali rice, as its aroma has faded due to lack of development," said Mr Chookiat.
Unfortunately, Thailand spends a huge budget every year to artificially inflate the price of rice, but not much to promote the industry in a sustainable way.
Pramote Vanichanont, honorary president of the Thai Rice Millers Association, also supports a higher government budget for R&D to improve rice productivity and strains.
He said both the income guarantee plan used by the previous government and pledging cost the state about 50-60 billion baht per year and such funds should instead be used for sustainable improvement of the rice industry.
(Source: Bangkok Post, RICE TRADE, Summit between top two exporters meant to smooth shipments, 16/09/2011, Walailak Keeratipipatpong, link)
Rice Policy Vocabulary
summit - a meeting between the leaders or high level officials of two countries
rice summit - a meeting about rice between the high level officials of two countries
talks - negotiations, formal discussions of problems between different sides in a conflict in order to solve the problem
hold talks - have a series of formal discussions (between states, for example)
trade - the buying and selling of goods การค้าขาย
trade arrangements - informal agreements about the buying and selling of goods (here: between two states
revival - bring back to life again, bring back into use something that has not been used for a period of time
scheme - a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ
crop mortgage scheme - the old system of helping farmers (not insurance to protect against price fluctuations, but an outright subsidy made to look like a loan)
pledging prices - the price that the government buys a crop from the farmers
volume - the quantity or amount of something
export volume - the amount of a crop exported
expected - believe will happen คาดว่า (จะเกิดขึ้น)
presume - think that something is true (but not sure)
all roads will lead to Vietnam next year - meaning: lots of buyers (rice importers) will be looking to buy from Vietnam next year
we presume that all roads will lead to Vietnam next year - we believe that all the buyers will go to Vietnam next year
measures - actions that are intended to achieve or deal with something มาตราการ
cool down rice sales - decrease rice sales
rice sales too active - too much rice being sold
annual - happening once a year ประจำปี
meeting - when a group of people come together to discuss issues and make decisions การประชุม
annual meeting - a meeting that happens one time every year
pacts - agreements
implementation - the process of making something such as a plan, system, idea or law start to work and be used, execution of a plan (See glossary) การบังคับใช้ (กฎหมาย) นำ (แผนการ) มาบังคับใช้
implementation of Asean Economic Community in 2015
paddy - rice after it has been harvested from the field ข้าวเปลือก
harvest - gather in ripe crops เก็บเกี่ยว การเก็บเกี่ยวผลผลิต
improve - to get better ดีขึ้น
competitiveness - how well a business can do compared to other firms (does it have lower price or higher quality?), how well a company is able to maintain or gain customers in a market การแข่งขัน
challenge - something that needs a lot of skill, energy, and determination to deal with or achieve สิ่งที่ท้าทาย, การท้าทาย
faces a challenge
lift - to end a warning, a restriction, etc. ยกเลิก
ban - an official statement ordering people not to do, sell or use something การห้าม ห้ามอย่างเป็นทางการ
lift a rice export ban - end a ban on exporting rice (allow rice to be exported again)
projection - a calculation or guess about the future based on information that you have การคาดคะเน
parboiled rice - rice that is boiled until partly cooked
attractive - worth having or doing, interesting, pleasant to look at น่าสนใจ
attractive prices - a good price that buyers are interested in
Research and Development (R&D) - scientific investigation to develop new consumer goods and services, new inputs into production, new methods of producing goods and services, or new ways of operating and managing organizations (See Wikipedia)
investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
investment in research and development - putting money into projects that could result in new products or industrial processes
strain - one kind or variety of plant (or other living thing such as a bacteria)
grain - the seed from cereal crops such as rice, wheat, or corn เมล็ดพืช
strain of grain - one kind of grain (one kind of rice, for example)
threat - a danger อันตราย
aroma - a strong pleasant smell
fade - become weak (less strong, less intense, less noticeable)
aroma faded - the smell became weak (less noticeable)
lack - does not have ขาดแคลน
lack of development - has not been developed (no improvement over time, through research, for example)
budget - an amount of money able to be spent on something งบประมาณ
inflate - to make something larger เพิ่มขึ้น
artificial (adjective) - a situation created by human beings (seeming unnatural and unnecessary)
artificially inflate the price of rice - meaning the prices do not come from rice supply and demand, as they naturally do, but were rather set artificuially high to get votes
promote - to move someone to a job at a higher level เลื่อนตำแหน่ง
sustainable - able to be successfully continued for a long time ยั่งยืน, ถาวร แบบยั่งยืน ที่ดำเนินต่อไป
promote the industry in a sustainable way - help the industry to increase its long-term strength
improvement - when something gets better or when you make it better การปรับปรุง, การทำให้ดีขึ้น
sustainable improvement of the rice industry - making improvements that will continue to provide benefits for a long time (for example, new strains of rice from research and development)
support a policy - agree with the policy, think that it is a good policy
productivity - producing more with the same amount of inputs (labour, energy, etc) การผลิตสินค้า
supports a higher government budget for R&D to improve rice productivity
funds - money needed or available to spend on something เงินทุน
income - money that people receive from work or some other source, used for household consumption and savings
guarantee - a promise that something will be done or will happen คำรับรอง, การประกัน (See glossary)
income guarantee - promising that someone will receive a certain amount of money, for sure
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