The price of rice will rise to 700 USD per tonne next year even thoughIndia has returned to the market, according to the CEO of The RiceTrader, a leading trade publication and analyst of the global riceindustry.
Speaking at the World Rice Conference in HCMCity on Oct. 20, Jeremy Zwinger said prices would go up because ofincreased flooding, a 15 percent drop in production in South America,and Thailand's decision to buy unmilled grain at 15,000 baht (500 USD) atonne to boost rural incomes.
Flooding will affect crops in Cambodia , Vietnam , and especially Thailand .
The Thai price intervention in buying unmilled grain would push up prices on the market in 2012, he said.
In addition, with rice crops hit by natural disasters and stocksshrinking, the Philippines is expected to buy rice in December whichwill be shipped in January. Indonesia is also in need of more rice.
Cuba will likely buy rice from Vietnam , according to Zwinger.
"If you look at the Thai minimum rice price right now at 750 USD pertonne, … the market can easily reach 700 USD, even here," he said.
Thailand and Vietnam have experienced dramatic growth in rice exports this year.
As of October 11, Thailand had exported 9.4 million tonnes of rice,up 45.16 percent over last year. Vietnam had exported 5.99 milliontonnes, up 8.8 percent.
India exported 2.13 million of rice, a year-on-year increase of 11.38 percent.
The 2011-12 harvest in India is likely to send grain stocks soaring and hence pressure markets to allow exports.
Korbsook Iamsuri, president of the Thai Rice Exporters Association,said India 's return to non-basmati rice exporting plus theGovernment's rice-pledge scheme would shrink the market share for Thairice, especially for parboiled rice, since India offers a low price.
Thailand 's parboiled rice enjoyed strong growth inSouth Africa this year, but with the return of Indian parboiled riceexports, Nigeria , Bangladesh and South Africa could substituteIndian for Thai rice, she said.
"I don't know how much market share the Thai rice will lose, but I hope that it is not substantial," she said.
Although affected by severe flooding, Thailand is not short of ricesince 4 million tonnes of rice still remain in stock at enterprises,and nearly 1 million tonnes are in Government warehouses.
Zwinger said investment in food resources had not occurred at the level needed to keep up with population growth.
"Frankly, food has been undervalued and this undervaluation has led to the current price volatility."
Food commodities needed a high level of investment, even in Vietnam and the Philippines , he said.
He recommended that rice traders keep a close eye on the rice market because of its volatility.
Speaking at the conference, Bui Ba Bong, Vietnamese Deputy Minister ofAgriculture and Rural Development, said rice is the most important foodcrop in Vietnam , representing the life and culture of the people.
The country has 4.1 million ha under rice cultivation, accounting for44 percent of total arable land, offering the main source of income forabout 10 million households in rural areas.
In 1990 riceproduction in Vietnam was only 19 million tonnes, but it increasedto 40 million tonnes last year, despite a drop of 280,000ha of ricefields over the last 10 years.
The average rice yield hasincreased from 3.18 tonnes per ha in 1990 to 5.3 tonnes per ha in 2010,topping all ASEAN countries.
Vietnam started to export rice in 1989 with more than 1 million tonnes.
The figure last year reached a peak of 6.8 million tonnes and thisyear, despite severe natural calamities, particularly floods, thecountry expects to export more than 7 million tonnes of rice.
However, the industry faces challenges, including a reduction in riceland due to industrialisation and urbanisation, a labour shortage, andeffects from climate change.
To make the rice economy moreprofitable, the country would strictly control rice land use, sustainthe growth of rice yields, and use technology to reduce post-harvestlosses, Bong said.
Vietnam is expected to have 3.8 million hectares of rice land by 2020, a reduction of 300,000ha from 2010.
The conversion of rice land to other uses should be strictlycontrolled, he said, adding that policies that help farmers should alsobe developed.
Moreover, a significant increase ininvestment for rice research and development would help consolidate thetechnological base for rice production.
He said new rice varieties would be needed to adapt to drought, salinity, water submergence, high temperatures and disease.
New rice crop management, for example GAP (good agriculture practices),should be used by all farmers to increase rice yield and quality andreduce production cost.
Bong said modernisation of riceproduction should be strengthened to reduce reliance on human resourcesand reduce post-harvest losses.
Rice export policiesshould ensure profitability for the country and farmers, and protect allstakeholders in the rice industry.
According toGovernment figures, Vietnam expects to harvest 41.6 million tonnes ofpaddy this year, 1.5 million tonnes more than last year./.
Speaking at the World Rice Conference in HCMCity on Oct. 20, Jeremy Zwinger said prices would go up because ofincreased flooding, a 15 percent drop in production in South America,and Thailand's decision to buy unmilled grain at 15,000 baht (500 USD) atonne to boost rural incomes.
Flooding will affect crops in Cambodia , Vietnam , and especially Thailand .
The Thai price intervention in buying unmilled grain would push up prices on the market in 2012, he said.
In addition, with rice crops hit by natural disasters and stocksshrinking, the Philippines is expected to buy rice in December whichwill be shipped in January. Indonesia is also in need of more rice.
Cuba will likely buy rice from Vietnam , according to Zwinger.
"If you look at the Thai minimum rice price right now at 750 USD pertonne, … the market can easily reach 700 USD, even here," he said.
Thailand and Vietnam have experienced dramatic growth in rice exports this year.
As of October 11, Thailand had exported 9.4 million tonnes of rice,up 45.16 percent over last year. Vietnam had exported 5.99 milliontonnes, up 8.8 percent.
India exported 2.13 million of rice, a year-on-year increase of 11.38 percent.
The 2011-12 harvest in India is likely to send grain stocks soaring and hence pressure markets to allow exports.
Korbsook Iamsuri, president of the Thai Rice Exporters Association,said India 's return to non-basmati rice exporting plus theGovernment's rice-pledge scheme would shrink the market share for Thairice, especially for parboiled rice, since India offers a low price.
Thailand 's parboiled rice enjoyed strong growth inSouth Africa this year, but with the return of Indian parboiled riceexports, Nigeria , Bangladesh and South Africa could substituteIndian for Thai rice, she said.
"I don't know how much market share the Thai rice will lose, but I hope that it is not substantial," she said.
Although affected by severe flooding, Thailand is not short of ricesince 4 million tonnes of rice still remain in stock at enterprises,and nearly 1 million tonnes are in Government warehouses.
Zwinger said investment in food resources had not occurred at the level needed to keep up with population growth.
"Frankly, food has been undervalued and this undervaluation has led to the current price volatility."
Food commodities needed a high level of investment, even in Vietnam and the Philippines , he said.
He recommended that rice traders keep a close eye on the rice market because of its volatility.
Speaking at the conference, Bui Ba Bong, Vietnamese Deputy Minister ofAgriculture and Rural Development, said rice is the most important foodcrop in Vietnam , representing the life and culture of the people.
The country has 4.1 million ha under rice cultivation, accounting for44 percent of total arable land, offering the main source of income forabout 10 million households in rural areas.
In 1990 riceproduction in Vietnam was only 19 million tonnes, but it increasedto 40 million tonnes last year, despite a drop of 280,000ha of ricefields over the last 10 years.
The average rice yield hasincreased from 3.18 tonnes per ha in 1990 to 5.3 tonnes per ha in 2010,topping all ASEAN countries.
Vietnam started to export rice in 1989 with more than 1 million tonnes.
The figure last year reached a peak of 6.8 million tonnes and thisyear, despite severe natural calamities, particularly floods, thecountry expects to export more than 7 million tonnes of rice.
However, the industry faces challenges, including a reduction in riceland due to industrialisation and urbanisation, a labour shortage, andeffects from climate change.
To make the rice economy moreprofitable, the country would strictly control rice land use, sustainthe growth of rice yields, and use technology to reduce post-harvestlosses, Bong said.
Vietnam is expected to have 3.8 million hectares of rice land by 2020, a reduction of 300,000ha from 2010.
The conversion of rice land to other uses should be strictlycontrolled, he said, adding that policies that help farmers should alsobe developed.
Moreover, a significant increase ininvestment for rice research and development would help consolidate thetechnological base for rice production.
He said new rice varieties would be needed to adapt to drought, salinity, water submergence, high temperatures and disease.
New rice crop management, for example GAP (good agriculture practices),should be used by all farmers to increase rice yield and quality andreduce production cost.
Bong said modernisation of riceproduction should be strengthened to reduce reliance on human resourcesand reduce post-harvest losses.
Rice export policiesshould ensure profitability for the country and farmers, and protect allstakeholders in the rice industry.
According toGovernment figures, Vietnam expects to harvest 41.6 million tonnes ofpaddy this year, 1.5 million tonnes more than last year./.
