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AFTA lifting Thai-Asean volume sharply.
Afta lifting Thai-Asean trade sharplyTariff cuts under the Asean Free Trade Area (Afta) since the beginning of this year have significantly raised Thai exports to Asean, with two-way trade expanding 52% in the first quarter, according to Deputy Commerce Minister Alongkorn Ponlaboot.
He said the value of bilateral trade between Thailand and the other nine Asean members reached US$17.64 billion in the quarter. Thai exports to the region rose 67% year-on-year to $10.52 billion, with imports up 33.9% to $7.11 billion.
Leading exports included sugar, tapioca products, rice, finished oil, automobiles and parts, air-conditioners and parts, electrical circuits and rubber.Sugar led the growth, rising 340%, followed by tapioca products (272.2%), rice (191.3%), finished oil (114%) and automobiles and parts (106%).Asean is now the largest export market for Thailand, making up 20% of the country's total exports, followed by Europe, Japan and the United States.
``More Thai exporters should apply for Afta tariff benefits, as statistics show only 20% worth of goods had applied for the tariff elimination scheme under Afta,'' said Mr Alongkorn.
The expanded Afta has eliminated tariffs on about 97% of all goods traded within the region.
In the Asean market, Malaysia was the biggest market for Thai exports, making up 23.6% of total shipments, followed by Singapore (19.9%), Indonesia (18.2%), and Vietnam (12.1%).
Asean is also the second largest market from which Thailand imports (16.8% of the total), behind Japan at 20.6%.
Imports are mainly capital goods, semi-finished goods and raw materials for production and re-export. Malaysia accounted for 37.5% of Thailand's imports, Singapore 20.9%, Indonesia 18.7% and Burma 8.2%.
Trade between Thailand and Asean was worth $51.59 billion last year, $29 billion of which represented Thai exports. Thailand's total trade was estimated at $280 billion with exports of $150 billion.
Source: Bangkok Post
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Hom Mali in Hong Kong Faces threat (Mar 25'2010)
Thai Hom Mali rice in Hong Kong is at risk of losing its market share, as China and Vietnam are aggressively shipping low-quality grain to Hong Kong, warns Commerce Minister Porntiva Nakasai.
To address that threat, the minister yesterday held talks with Hong Kong Trade Minister Rita Lue in Hong Kong in the latest attempt to expand trade and investment.
Hong Kong is estimated to import 313,000 tonnes of Hom Mali rice worth about US$200 million a year. Thai Hom Mali rice controls 82% of the Hong Kong rice market.In 2009, Hong Kong imported 257,899 tonnes of Thai Hom Mali rice, followed by 40,045 tonnes from China and 15,954 tonnes from Vietnam.
Thailand exported about 2 million tonnes of Thai Hom Mali rice including broken grains last year, said Chookiat Ophaswongse, the honorary president of the Thai Rice Exporters Association. This year's shipments are estimated at the same level as 2009, he said.
Mrs Porntiva said that apart from intensified competition from cheaper grains, Thai Hom Mali rice was becoming adulterated with lower quality rice.
The minister wants the Foreign Trade Department and the private sector to study and develop rice standards and organise roadshows in Hong Kong.
She added Thai authorities have also discussed the possibility of promoting the grain through movies.Thai rice prices, the benchmark for Asia, rose yesterday for the second straight week as the baht strengthened, said the exporters' association.
The price of 100% grade-B white rice gained 0.2% to $543 a tonne, and 25% broken rice was set at $452 a tonne compared with $451 last week.
Source: Bangkok Post
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Thai rice traders fear Vietnam's rise. (Mar 1,2010) |
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While planthopper infestations and droughts are major concerns for Thailand's rice trade, the biggest challenge remains the increasing threat from Vietnam, say local exporters.
Thailand's white rice exports last year dropped sharply by 43% year-on-year to 2.37 million tonnes, while Vietnam's exports of the same rice rose by 27% to 5.33 million tonnes.
Vietnam's shipments were made to major markets that previously purchased large volumes of rice from Thailand, such as Malaysia, Singapore, and the Philippines.
The strong sales in January, when Vietnam's rice exports grew by 20%, ensure that the country will most likely meet its rice export projection of 6 million tonnes.
"Shouldn't we stop blaming one another for the current paddy price falls and start considering how we could compete effectively with Vietnam?" questioned Sopan Manathanya, director of the Thai Rice Exporters Association, at the meeting among farmers, millers, and exporters in Suphan Buri last week, where falling prices was among the hot topics.
Vietnam's devaluation of the dong by 5% against the US dollar last November and 3.4% in February is expected to strengthen the competitiveness of its rice exports.
Last week, the price quotes for Vietnamese rice were much lower than those of Thai rice, by more than US$100 per tonne for low-grade or 25% white rice, and $130 a tonne for premium types.
The meeting viewed that a new venture, Cambodia-Vietnam Foods Co, would beef up Vietnam's rice trade. Established with an initial cost of $8 million by Investment and Development Joint Stock Co (IDCC), Vinafood and Green Trade Co of Cambodia, the company operates a fully integrated rice business, from production and processing to exporting.
Furthermore, the Vietnam Food Association's plan to set up a $6-million fund to improve its rice quality could threaten future Thai exports.
Many exporters have urged the Thai government to sell some lower-priced rice from state stockpiles to foreign markets so that it can compete with Vietnam's products.
But some have encouraged the industry to focus on better-grade rice, such as Hom Mali fragrant rice, to avoid fierce competition.
Korbsook Iamsuri, president of the association, said that the brown planthoppers and droughts are unlikely to deter plans to export 9-10 million tonnes of rice this year but the falling purchasing power of some countries could.
"Some African countries that have bought parboiled rice from us could turn to lower-priced grains, especially wheat and corn, and once they are accustomed to the taste, we might lose these markets," she said.
Ms Korbsook said Thailand has already lost market share in Malaysia and Singapore as buyers have shifted to lower-priced products.
Despite intense competition from Vietnam, she is confident the Thai exports will meet the projection, driven by rising global trade estimated at 437.12 million tonnes, up from 434.94 million tonnes last year. Thailand exported 8.57 million tonnes of rice worth 170 billion baht last year.
Source: Bangkok Post
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PM insists rice prices must be fair.(FEB 24,2010) |
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Govt scraps sales of rice stocks; Move made to scotch rumours of huge sell-off .
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The government last week scrapped its second attempt in less than a month to sell rice from its stocks, citing "unacceptably low" bids from exporters.
It also vowed not to sell any rice stocks over the next 3-4 months to curb falling prices, which have weakened since rumours spread that the government would sell up to 2 million tonnes from its rice stocks over the next few months.
An industry veteran said there are rumour-mongers who want to batter the rice prices and dismantle the government's price insurance programme for farmers in order to force a return to the previous rice pledging or intervention scheme.
The incumbent government first introduced the crop insurance or options programme for the 2009-10 harvest season to manage key crop prices and guarantee farmers' incomes.
It replaces a pledging scheme, used by successive governments, which offered high prices and proved to be politically popular in rural communities.
The new price insurance scheme represents income support paid directly to farmers. Payments will be based on the difference between insured prices and benchmark prices, regardless of the market prices farmers receive when they sell their crop.
The insured prices are based on average production costs and a profit margin of 30% to 40%. The benchmark prices were based on weighted average wholesale prices of rice in Bangkok equivalent to paddy with less than 15% moisture content.
The benchmark price will be set on the first and sixteenth days of each month.
The programme is designed to benefit all farmers, particularly small-scale farmers. Compensation will be transferred directly to farmers by the Bank for Agriculture and Agricultural Co-operative (BAAC).
Farmers will manage their own sales decisions in terms of when to capitalise on the spread between the insured price and the benchmark price.
"Such rumours are possibly set up collaboratively by traders, millers and politicians who want to foil the government's crop insurance plan and force it to turn back to traditional intervention programme," said Nipon Wongtrangan, honorary president of Thai Rice Millers Association and ex-president of Thai rice Millers Association.
"As we saw in the previous week, the prices of local paddy has significantly reduced to as low as 6,000 baht per tonne in certain areas, opening room for certain groups of millers to buy local grain at cheaper prices.
"Once the prices fell, a group of farmers immediately staged a rally that was well equipped with loudspeakers and amplifiers. The farmers' rally seemed to be too well-organised."
Mr Nipon said the farmers protested even though they were fully aware that the government offers them 9,000 to 10,000 baht per tonne of paddy under the crop insurance programme.
Mr Nipon said declining prices also benefit investors in the futures market, as they could buy the futures cheaply and profit once the prices rose.
"We believe the rice prices will gradually increase after the market realises the rumours are not true," said Mr Nipon. "The National Rice Policy Committee has insisted the government would not sell 500,000 tonnes from its rice stocks to curb supply."
Rice prices are unlikely to be on a par with last month, when milled rice fetched 16,000 to 17,000 baht per tonne, as the market realised second-crop harvests from Thailand, Vietnam and India would come out during March. Milled rice is currently quoted at about 15,000 baht per tonne.
Mr Nipon predicted rice prices would rise from the middle of the year, as El Nino is expected to cause dry spells and cut crop output.
Source: Bangkok Post | |
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Rice bid for 500,000 tonnes due Monday.FEB 22'2010
The government will open bids to sell 500,000 tonnes of rice from stockpiles to exporters next week as part of its accelerated plan to sell 1-2 million tonnes ahead of the new harvest of second-crop paddy to reduce costly stock.Vichak Visetnoi, director-general of the Foreign Trade Department, said the Commerce Ministry next Monday would offer 350,000 tonnes of 5% broken white rice and 150,000 tonnes of Pathum Thani fragrant rice to exporters.
"The timing is right during the next two months to release stocks as key exporters such as Vietnam and Burma have slowed their shipments while demand remains strong," he said.
Commerce Minister Porntiva Nakasai said the ministry was also speeding auctions of 300,000 tonnes of milled rice with the Agricultural Futures Exchange of Thailand. The government last year approved the sale of about 1 million tonnes of Hom Mali and 5% white rice through the futures market under a "basis auction" method in which AFET rice futures are used as the reference.
The market has conducted auctions for state stocks totalling 700,000 tonnes.
According to Mrs Porntiva, the National Rice Policy Committee recently directed the ministry to study a plan to sell another 1 million tonnes via the futures market this year.
Mr Vichak said the government was likely to sell as many as 700,000 tonnes under a government-to-government programme this year.
"There is a lot of demand for G-to-G rice deals now. Malaysia wants to buy about 100,000 tonnes, while Mauritius needs about 50,000 tonnes, Indonesia needs 100,000 tonnes, and the Philippines is preparing to open bids for 600,000 tonnes," he said.
The government estimates it is holding around 5.6 million tonnes of milled rice bought from farmers to support prices in the previous season.
Source: Bangkok post
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Commerce Ministry to release 1.5m tonnes of rice.(Feb 18'2010) |
