While U.S. rice exporters focused on the Colombian market for import demand during the past few weeks, little activity actually materialized. Due to favorable pricing, Thailand has secured the largest portion of the Colombian business with sales of 50,000 tons of milled rice. Although the Colombian government issued import permits for 160,000 tons several weeks ago, sales of only 14,000 tons of U.S. paddy have been reported. Overall U.S. rough rice exports estimates for 2000/01 were raised 1 million cwt by the USDA to a record 27 million cwt.
After receiving presidential approval for the import of 200,000 tons, the Philippine National Food Authority (NFA) announced a call for bids from government agencies of several countries for rice sourced from China, Thailand of Vietnam. The delivery period is May 1- July 13 (50% of the rice must arrive by June 30). The NFA reported that they are using the previous Viet government price of $144.20 (C&F) as a benchmark for the government negotiations.
Rice market activity in Thailand is slow on light international demand. The government’s intervention plan is helping to keep prices steady in the short term despite new crop supply. Many traders believe that the intervention program will have negative long-term impact as the process discourages exporters from purchasing rice. The program forces exporters to offer prices that are in line with the government’s higher intervention prices rather than to the prices of exporting competitors. Currently, the Thai government holds about 1 million tons of milled rice and 1 million tons of paddy in intervention stocks.
Traders report some 100%B business with Iran, but the purchases have not been large enough to have a significant effect on the market. Thai 100%B is now quoting in the $167-169 per ton range FOB. Overall Thai rice exports for the period January 1-April 10 totaled 1,498,841 tons, a 7,977-ton decrease from the same period in 2000.
Despite slow global demand and new winter-spring supply, Vietnamese rice prices have remained steady. Buyers from Africa, the Philippines, Iraq and Cuba are turning to the country for competitively low prices. The government's stockpiling effort is also helping to stabilize Vietnamese rice values. Vietnam is expecting April rice exports in the 350,000-ton range, a 52% increase from March totals. The Vietnamese 2001 winter-spring crop is expected to yield over 8.1 million tons of paddy, a 100,000 ton increase from production totals last year. The winter-spring harvest in the Mekong Delta will be complete by late April.
As a result of strengthened rice supplies in recent years, Vietnam announced it will end all quotas and controls on rice exports. Beginning May 1, all traders will be able to export rice. The new policy will extend from 2001 to 2005. Vietnam’s Trade Ministry has also suggested the government change the policy for payment to allow for an extension of payment terms in order to boost exports. Currently, commercial deals can only be sealed with payment up to six months. The Trade Ministry is suggesting accepting deferred payments terms of up to 720 days. Export demand for rice from Pakistan has diminished during the past few weeks as buyers have switched to buying cheaper Vietnamese rice. The market is quiet and domestic demand weak. Prices remain were mostly steady. With the rupee at record lows against the U.S. dollar, exporters are still able to make some shipments despite low profit margins.
Some Pakistani traders believe prices will soon rise if there are delays in sowing the new crop because of water shortages. Major water deficiencies are expected in Pakistan for the next crop season, which is normally sown from June on. Pakistani exporters could possibly be forced to buy IRRI-6 variety to cover future positions.
The Food Corporation of India continues to offer rice from its stockpile at levels that are considered uncompetitive on the international market. A practical solution to the huge problem of surplus rice in the country remains elusive for the Indian government. Most of the India's winter rice crop is now in good condition. The crop is expected to fill and mature within the next few weeks, with harvesting likely to begin in late April or early May.
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