October 27, 2009 16:33:56
Philippines to hasten rice imports on concern prices may surge

The Philippines, the world’s biggest rice buyer, plans to bring forward imports for 2010 to beat other nations to the market before prices surge and ensure stockpiles aren’t drained, the National Food Authority said.

“We need to prepare” for the shortfall, Jessup Navarro, administrator of the authority, said in an interview in Manila Monday. “We need to bring in the rice we need right away.”

The Southeast Asian nation is rushing purchases on concern that drought in India and weather-related damage to crops in other parts of Asia may lead to a supply shortage, Navarro said.

“That could exert huge pressure on prices,” he said. “When there’s speculation, people are hoarding, other countries stop exports, while importing countries are trying to buy. Speculation, panic; you cannot control that,” he added, when asked if he see prices returning to record levels.

Rice futures surged to a record US$25.07 per 100 pounds on the Chicago Board of Trade in April 2008 as exporters including India and Vietnam curbed overseas sales and importers such as the Philippines rushed to boost shipments to secure domestic supplies and cool inflation.

Rice for delivery in January gained 0.2 percent to $13.70 per 100 pounds as of 10:54 a.m. Singapore time.

“For record prices to be hit again, it wouldn’t take much,” Euben Paracuelles, an economist at Royal Bank of Scotland Plc said by phone from Singapore Tuesday. “The same sort of weather problems are hurting output of these big rice exporters.”

Tender advanced

The National Food Authority, which manages the government’s grain stockpiles, has set its first tender for Nov. 4, when it plans to buy 250,000 metric tons of rice for delivery beginning January, more than a month ahead of the typical date. More tenders may be held this year, Agriculture Secretary Arthur Yap said Oct. 23.

The impact of the storms that damaged crops in the Philippines will not be felt by the domestic market until June next year, when supplies from the October-December and March-May harvests begin to run out, he said. Harvests from other parts of the country that were spared by the storms have kept prices stable, he said.

About 13 percent of the 6.5 million metric ton fourth-quarter output forecast by the government in August was lost as Tropical Storm Ketsana and Typhoon Parma hit the nation’s biggest rice-producing regions, the Department of Agriculture said in a report released Oct. 13.

The Philippines is assessing the damage from the storms and the possibility of ramping up output in the first harvest of 2010 before setting the total volume of next year’s imports, Navarro said.

http://www.thanhniennews.com/worlds/?cat....

Seems like a smart play.

India scraps rice import tax
By James Lamont in New Delhi and Javier Blas in London

Published: October 28 2009 10:50 | Last updated: October 28 2009 10:50

India on Wednesday scrapped its rice import duty as the government took emergency measures to increase food stocks after the worst drought in more than 30 years cut agricultural output.

India is the world’s second-largest producer and consumer of rice after China and has seldom made big purchases of rice on international markets. This year, however, it has been forced to turn to greater imports after one of the worst monsoons since 1972 and flooding damaged the domestic crop in northern India.

Poor Indian monsoon triggers rice price fears - Sep-09In depth: Global food crisis - Oct-28Special report: World food - Oct-28Asia’s third largest economy is also confronted by rising food prices and in the past months has put curbs on the export of agricultural commodities.

To ease the purchase of rice on international markets, the Central Board of Customs and Excise said it was lifting the 70 per cent tax for a year in view of the deteriorated weather conditions.

The US Department of Agriculture this week forecast a 15m to 17m tonne decline in India's rice output for 2009-10 from a record 2008-09 production of 99.2m tonnes. India is expected to consume about 90m tonnes this year.

Indian rice exporters said that the country would seek to import about 2m tonnes of rice in the coming months to build up stocks.

Rice importers in countries from the Philippines to Iran and South Africa have been watching the market for fear that India’s poor monsoon could push prices higher.

New Delhi estimates that Indian farmers have planted rice in 30.2m hectares, down 17.5 per cent from last year. With top-producing states such as Uttar Pradesh hit hardest, the monsoon crop could fall as much as 20-25 per cent, analysts said.

The drop in India’s output means that global demand will outpace supply for the first time since 2006, according to the US Department of Agriculture. It estimates the world’s supply at 433.5m tonnes, down 3 per cent from last year, and consumption of 438m, up 1.7 per cent.

The Indian government has assured consumers that it has enough food stocks to feed the country’s population for a year. Other countries, including China and Thailand, also have large stocks after two years of bumper crops, and cheap wheat will encourage a shift to other cereals.

But the Indian government is becoming increasingly worried about rising inflation, in part stemming from higher food prices.

“There are clear signs of rising inflation stemming largely from the supply side, particularly from food prices,” said Duvvuri Subbarao, the governor of the Reserve Bank of India. “Private consumption demand is yet to pick up. Agricultural production is expected to decline.”

Rice is Asia’s staple and governments are wary after export restrictions last year from India and Vietnam triggered panic buying, pushing prices to a record high above $1,000 per tonne. Prices have fallen since but benchmarks remain at about $520 a tonne, double the pre-crisis levels in 2007.

http://www.ft.com/cms/s/0/a5257882-c3aa-....