Bangkok Post : General news
http://www.bangkokpost.com/News/28Mar2008_news01.php

Thailand braces for rice crisis
Soaring exports may cause local shortage


BANGKOK POST and AGENCIES


Thailand, the world's largest rice exporter, could face a shortage of rice after skyrocketing prices have encouraged traders to substantially increase their export volumes, Prasert Kosalwit, the director-general of the Rice Department, said yesterday.

Concerns over shortages could lead to the introduction of measures to control the amount of rice exported in the second half of this year if the price continues to increase. The measures have been floated by Deputy Commerce Minister Wiroon Techapaiboon.

Fears of a shortage come against a backdrop of signs of rice shortages in some countries, including the Philippines and neighbouring Cambodia.

The Cambodian government yesterday appealed for people to remain calm and not to stock up on food commodities after the government banned rice exports on Wednesday.

The Philippines rushed to sign a purchase agreement with Vietnam for 1.5 million tonnes of rice this year to alleviate an expected shortage in coming months. The agreement came one day after the government announced the country was facing a serious rice supply crisis.

India has banned the export of rice to other countries, while China and Vietnam have already reduced export volumes.

''A rice shortage in the local market is very likely,'' warned Mr Prasert.

His comment was supported by rice export volumes which were more than one million tonnes a month from October last year to February this year.

The stockpile under the supervision of the Commerce Ministry is 2.1 million tonnes. That could ease domestic rice shortages for about three months, said Mr Prasert.

In case the rice stocks are used up and the rice shortage gets worse, the Rice Department will encourage farmers to grow a mixed breed paddy with a high average yield per rai of 1,200kg. The growing period for the mixed breed paddy is only 110 days.

Rice Exporters Association president Chookiat Ophaswongse admitted that the rice price and global demand would rise further from the second quarter of this year.

This is because Iran and Indonesia, which are regular customers, have not yet placed their orders for this year, he said. The two countries are expected to do so in the middle of this year.

Iran is likely to order at least one million tonnes and Indonesia more than 1.5 million tonnes. This has prompted rice millers and farmers to hoard rice for future speculation as well, said Mr Chookiat.

But Mr Chookiat said he is confident the government rice stockpile of 2.1 million tonnes would be enough to prevent a rice shortage for three to four months until paddy from the new season is harvested.

He said the main shortage would come from the race to export rice to other countries.

Thailand could face problems only when it exports more than nine million tonnes a year, he said. Over the past five months, the country sold more than one million tonnes a month to other countries. If this export volume continues, a shortage is possible, he added.

Mr Chookiat supported measures to stamp out excessive exports, suggesting that the government prepare to put in place a minimum export price system, which has been in use in India.

''If the rising rice price continues, the measure may be needed in the second half of this year,'' he said.

Under the measure, the government requires exporters to sell rice at determined prices which are higher than the market price to slow exports.