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Growing concern over food security expected to drive demand for Thai rice

Oct 13. 2013
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AMID RISING concern over food security, many countries have shown strong interest in purchasing rice from Thailand to ensure adequate supply, Deputy Commerce Minister Yanyong Phuangrach says.
Such countries include China and nations in Asean, the Middle East and Africa, he said.
Yanyong said many international trade negotiations had started to include food security on their agendas since climate change had affected many countries’ agricultural production. 
“Many countries are worried about a food crisis as prices have risen because of climate change. Thus they will stock or purchase more cereals to ensure their food security,” Yanyong said.
He noted that food security was discussed recently at the Asia-Pacific Economic Cooperation summit and at a meeting of the United Nations’ Food and Agriculture Organisation. This resulted from lower output of cereal and grains in the past few months.
Although like Thailand, India has large stockpiles of rice, that country has started to delay rice exports to secure its stocks for future consumption, he said.
According to the Thai Foreign Trade Department, Vietnam has also been slowing its rice export in the past few months in anticipation of lower production in the 2013-14 harvests.
As a result, Thailand should be able to sell more rice from its stock?piles, Yanyong stressed, adding that the Kingdom was negotiating with many countries for rice purchases next year.
The ministry reports that Thailand has about 15 million tonnes of stored rice, of which 5 million tonnes already have contracts and are waiting for shipment.
Besides government-to-government contracts, Thailand is releasing rice from its stockpiles by opening bidding to exporters and local traders, as well as through the futures market.
However, the government is also concerned about lower rice output from the main 2013-14 harvest season, during which 10 million tonnes of rice is expected to enter the pledging programme. Yanyong said the volume of rice could be much lower than the target because some plantation areas had been damaged by floods.
Thailand may need to keep about 3 million to 4 million tonnes of rice as buffer stocks to ensure food security next year, the minister said.
A rice-trader source said many countries in Asean including Malaysia, the Philippines and Indonesia were in talks with Thailand on purchasing rice from the stockpiles to increase their food security. Such demand has kept up the market price of rice. 
The Thai Rice Exporters Association reported that the price of 100-per-cent white rice had not changed in the past two weeks at US$462 a tonne, while the price of jasmine rice is $1,190 a tonne.

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