Monthly Archives: August 2016

Strong baht irks exporters

Exporters have repeated their call for the Bank of Thailand to come up with measures to rein in the strong baht, warning that ailing exports will go from bad to worse with the currency left unharnessed.
Nopporn Thepsithar, president of the Thai National Shippers’ Council, said an appropriate rate for the baht against the US dollar is 34.50 baht. Anything stronger would hurt not just exports but also the overall economy, he said.
The baht was quoted yesterday at 34.55-34.57 to the dollar.
“Shipments are being hit hard by several negative factors, including the slower-than-expected economic recovery and foreign exchange swings,” Mr Nopporn said.
“Even worse, exports are facing new challenges from the World Health Organization, which listed Thailand as one of the high-risk countries for Zika and Mers virus transmission, leading China to impose stricter inspections on Thai goods to prevent bugs that are the carriers of disease.”
Despite better price prospects for products such as cotton, rubber, steel and fish, the prices of sugar, chicken and wheat remain low, said Mr Nopporn.
The Commerce Ministry last week reported that exports fell for the fourth straight month in July, with the contraction widening to 4.4% year-on-year that month against 0.1% in June. Exports similarly contracted 4.4% in May after plunging 8% in April.
July’s exports fetched US$17.4 billion (601.7 billion baht), with imports totalling $16.2 billion, down 7.2% year-on-year.
Thailand had a trade surplus of $13.6 billion in July — its 15th straight month with a positive trade balance.
The ministry reported that exports of agricultural and agribusiness products shrank by 18.6% to $2.34 billion, led by rice (-35.1%), rubber (-34.8%), sugar (-33.8%) and tapioca products (-28.4%).
Exports of industrial products fell again in July by 0.4% to $14.07 billion after expanding for the first time in three months in June, when they jumped 3.1% to $84.3 billion.
“We’re quite sure that exports will contract for the fourth straight year in 2016,” Mr Nopporn said.

Golden Rice still struggling for acceptance in Asia

Seventeen years ago, the promise of what is called Golden Rice seemed simple enough: insert a trait that adds beta-carotene to the genetic code of rice and watch the perils of blindness and death from vitamin A deficiency in children and pregnant women start to disappear. Impoverished Asian — and perhaps some Central American — countries where rice is eaten as much as three meals a day would obtain a low-cost, convenient way to end one of the worst scourges of malnutrition.

But the reality has proved far more complex. Golden Rice, so named because beta-carotene turns the rice kernels bright yellow, still remains short of commercialization after many years of testing and tweaking the genetics required to produce the seeds. It continues to be recommended as a way to eradicate devastating effects on the eyesight and immune systems of a large portion of children under five in the developing world, despite many bumps in the road along the way to production.

Organizations opposing all forms of bioengineered crops have kept up their special focus on blocking Golden Rice, said Robert S. Zeigler, Ph.D., plant pathologist and director general of the International Rice Research Institute (IRRI) from 2005 to 2015, who led the organization during much of the research and development of the beta-carotene enriched rice.
“You can see why there was excitement … here was a way we could use modern technology to transform the lives of the poor,” he told World Grain. “There were people, including myself, who did not understand how complex and difficult the process was going to be and how many potholes” were going to be encountered in the journey from invention to the marketplace, he said. A recurring problem was resistance from environmental groups such as Greenpeace International, which, Zeigler said, “have drawn a line in the sand to, quite explicitly, block Golden Rice.”

He said Greenpeace has argued that Golden Rice is a Trojan horse, taking the view that “if Golden Rice is allowed to succeed, that will be a justification for all GMOs to be introduced,” he said.

For a variety of reasons, many of which don’t have much to do with Greenpeace, Golden Rice remains unavailable to rice growers anywhere in the world, and experts estimate it will be at least a couple of years before it will be available, probably starting in the Philippines. Zeigler said large-scale trials in farmers’ fields would likely be in place in about 2019, with commercialization coming somewhat later.

“One of the questions is how a crop like Golden Rice would establish itself in the market,” he said. “It would be fairly straightforward for farmers to grow it and either buy the seed from seed growers, or, because of the nature of rice, they could even save their seed for one or two generations to produce it.”

The Philippines and Bangladesh are two countries with both a large impoverished population and a relatively advanced regulatory process for developing and disseminating bioengineered crops (Bangladesh has released an insect-resistant genetically modified eggplant) and Golden Rice would likely get its start growing there, Zeigler said. Other countries that may follow suit include Indonesia, Malaysia, Colombia in Central America and Haiti, a Western Hemisphere country known for its poverty.

Experts said China, the behemoth of Asia in terms of population, has made enough strides in feeding its people that the need for a product like Golden Rice is less pressing, although malnutrition has certainly not been eradicated. But dealing with genetically modified crops — and specifically Golden Rice — in China has been fraught. In 2013, Tufts University in Boston, Massachusetts, U.S., admitted its researchers violated ethical rules in a study feeding Golden Rice to children in China. Greenpeace in China contended scientists fed children a potentially dangerous product without informing parents, and China responded by closing down the research. The controversy “became a huge social media story and, if you look at attitudes toward GM by the Chinese public and Chinese consumers after that event, it went quite negative,” said Eric J. Wailes, Ph.D., distinguished professor of agricultural economics at the University of Arkansas, U.S.

India, where childhood malnutrition is significant, has a strongly anti-GMO policy that has been influenced by attitudes prevalent in the European Union, said Zeigler. And Thailand, one of the biggest exporters of rice, has said it will never grow Golden Rice.

Golden Rice made the news again this summer, when 107 Nobel laureates signed a letter urging Greenpeace to end its efforts to stop Golden Rice from coming onto the market. According to The Washington Post, one of the motivations for Greenpeace’s campaign against Golden Rice, in the opinion of signers of the letter, was that spreading fear about bioengineered crops helps raise money for their cause.

World Grain requested a response from Greenpeace to the Nobel Laureates’ letter, and received this email:

“Some organizations have asserted that GMOs such as Golden Rice could help impoverished populations combat vitamin A deficiency,” said Davon Hutchins, senior campaigner for Greenpeace International’s Food for Life campaign. “Golden Rice is still in the research phase after 20 years. It is not a viable solution available on the market, according to the IRRI There are also other ways to combat VAD (vitamin-A deficiency) without resorting to “silver bullet” GMOs, like a more balanced diet rich in all vitamins, including vitamin A. Many of our partners in developing countries like Southeast Asia and Africa simply don’t want to be forced to choose or become reliant on GMO crops and we respect their concerns and reservations.”

Wailes offered a rebuttal.

“Obviously, a more diversified diet with foods high in beta-carotene, such as leafy greens, vegetables and fruits is for some countries a better way, but if a family is living on less than $2 per day, access to a diversified diet is not generally possible.”

While high-profile skirmishes in the GMO wars attract the public’s attention, other, less dramatic issues have also been a focus of the Golden Rice debate.

The amount of willingness farmers have to grow Golden Rice, its financial cost relative to other types of rice, its yields and its other agronomic attributes are useful questions in evaluating the efficacy of Golden Rice. Experts have spent time considering how best to convince impoverished and often poorly educated consumers to try the new product — despite its being a color they might associate with urine or discoloration and spoilage, noted Wailes.

He said rice exporting and importing nations remained concerned about the potential for bioengineered rice to co-mingle with other types of rice. Major rice growing and exporting countries in the Far East, such as Thailand, have said they will not grow and export Golden Rice abroad because of these perceived risks.

“I think we should salute the anti-GMO community for getting the word contamination in common use,” Zeigler said sardonically. “It has a very negative connotation.”

He noted that many countries have “very onerous rules against the sale or distribution of GMOs that have not passed regulatory approval.”

Proponents of Golden Rice note that one potential problem for Golden Rice — patent restrictions and, with them, potentially higher seed costs, has been “put to bed,” said Zeigler. Syngenta, the biotechnology company that developed Golden Rice, has given up its intellectual property rights on Golden Rice as a humanitarian initiative. Farmers wouldn’t have to pay more for Golden Rice seed, and the IRRI has been given a free hand by Syngenta to work with the technology.

“Part of the original challenges in getting Golden Rice ready were, in fact, the result of a requirement of the inventors,” Zeigler said. “They imposed a requirement that Golden Rice couldn’t be sold at a premium, with the intention of making sure nobody profited from what they perceived as an international public good.”

He said Golden Rice would have to have the same yield and quality of ordinary rice, which represented a significant breeding challenge.

“The materials where the Golden Rice advantage was originally put were completely unsuitable for Asian rice projection conditions,” he said. “So there was a major breeding undertaking to get those genes together in a material farmers would grow.”

He continued, “The kind of setbacks and false starts that happened in developing this trait was something that kept me up at night.”

As things currently stand, yields of Golden Rice grown, at least in the Philippines, aren’t as consistent as yields of conventional rice.

With the question of pricing Golden Rice seed resolved, farmers would likely focus on other variables as to whether to plant the bioengineered seed. One of their decisions would be whether the nutritional attributes of Golden Rice would make a difference. Wailes at the University of Arkansas said studies have shown that 40% to 50% of farmers would be willing to grow bioengineered rice that offers a 10% improvement in nutrition over other varieties.

Zeigler said rice markets in the Philippines and Bangladesh are partly controlled by a government food authority that sets the price of rice. In addition, “there is quite a lively market in the rice trade,” he said, with farmers making their own planting decisions.

“Farmers are businesspeople and will grow a crop to make a profit,” he said. “If there is not demand for Golden Rice beyond just regular rice, they will only grow Golden Rice if they get a good yield and a good price for it.”

Zeigler firmly believes demand for Golden Rice will ratchet higher when governments make an effort to spread the news about its significant health benefits.

“It will require a marketing effort to educate consumers,” he said. “It’s a legitimate role for the public sector. NGO’s would be involved. I hope religious entities become involved, as for anything that improves the health of children.”

Govt must take steps to promote rice exports, says REAP

The Rice Exporters’ Association of Pakistan (REAP) has urged the government to take fiscal and diplomatic measures to create a conducive environment aimed at both reducing the cost of production and boosting exports.

The association raised these concerns at the 6th meeting of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Standing Committee on Rice Exports for 2016 earlier this week and chaired by FPCCI Standing Committee Chairman Rafique Suleman.

Rice exports: Let the market innovate

“China should adopt an on-arrival visa policy for Pakistani businessmen to enhance and promote bilateral trade and economic relations between the two countries,” said Suleman.

“Both Pakistan and China share a cordial relationship and a lot of Pakistani businessmen are travelling to China for their businesses. Moreover, the two countries have also signed an FTA under which a lot of trade is taking place between the two countries,” he added.

He urged the government to take up the matter with the respective Chinese authorities and strengthen its relationship with China. “Adoption of this policy will go a long way in strengthening Pak-China friendship.”
Suleman said that REAP had put forward their proposal to the President of Pakistan, which mainly includes having a REAP member on the Pakistan Research Board.

According to the chairman, Pakistan and Indonesia have always shared a cordial relationship and therefore the government must further improve trade with the country. “Indonesia is highly impressed with Pakistani rice exporters since all the orders have been fulfilled. This is also a reason why the Indonesian government is sending a delegation from BULOG to visit rice mills in Pakistan.”

Bulog delegation coming: REAP wishes to negotiate rice exports to Indonesia

Suleman, while requesting the government to exempt import of rice machinery from taxation, said doing so would reduce the cost of production and eventually lead to a reduction in price of rice, which will not only help exporters but farmers as well.

The FPCCI Standing Committee chairman appreciated that the much-awaited draft on Geographical Indication (GI) Bill 2016 was presented by the Intellectual Property Organization (IPO) before the relevant stakeholders including lawyers, businessmen and bureaucrats. “The Pakistan’s GI protection law had been long overdue and the IPO should expedite the process of making this draft into a law,” he observed.

REAP was of the opinion that the TDAP must be the custodian of GI rights of all commodities; particularly basmati rice. He also mentioned the need to promote basmati rice in the international market.

“Pakistan has one of the best qualities of basmati rice in the world and Saudi Arabia and Iran are potential markets that should be explored,” he said.

“I appreciate the efforts of the government to create a proper banking channel with Iran, which would give a huge boost to the Pakistani economy, especially in the trade of basmati rice.”

Asia’s rice market reaches semblance of normality after Thai upheaval

Asia’s rice markets are showing signs of returning to what could be described as normal trade, even as the last acts of Thailand’s ultimately disastrous subsidy scheme play out.

While Thailand’s benchmark 5-percent broken rice has slumped 15 percent in the past month to $376.50 a ton, it’s likely that move is driven mainly by supply and demand factors, rather than political intervention and its aftermath.

The rice market has been characterized by distortion since former Thai prime minister Yingluck Shinawatra implemented a rice-buying system after winning elections in 2011.

Her government’s plan was simplistic and deeply flawed, and while it may have delivered higher incomes to her rural supporters, it resulted in a massive surplus of rice entering government stockpiles – a blowout in Thailand’s budget and ultimately leading to her ouster by the military in 2014.

Yingluck believed that Thailand could unilaterally raise the price of rice to overseas buyers given its status as the world’s largest exporter of the grain that is the staple food for about two-thirds of the world’s population.

All she succeeded in doing was encouraging India to start exporting its massive surplus, as well as delivering market share to regional rival Vietnam, with both those countries overtaking Thailand in the export stakes.

In the meantime, Thailand built up a stockpile of more than 20 million tonnes of rice, equivalent to about double its usual annual exports.

These inventories acted as a drag on the rice price, even after the new military government in Thailand ended the subsidy scheme and started selling down the stockpile.

This process still has way to go with Thailand planning to sell another 1 million tonnes of rice in August, which will reduce its stockpile to something closer to eight million tonnes.

This is a much more manageable figure, indicating that rice is more likely to trade on supply and demand fundamentals in the coming months, and that Yingluck’s intervention and its aftermath will eventually fade into memory.

The question then becomes as to which direction are the fundamentals pointing, and is the sharp price decline of recent weeks the start of a new bear cycle.

It’s still the case that rice markets appear well supplied, even though the now faded El Nino weather event brought drought and reduced crops in major producers India, Thailand and Vietnam.

There is some doubt among weather forecasters about the strength of the current La Nina event, where lower sea-surface temperatures in the Pacific tend to cause heavier rains across Southeast and South Asia, as well as in Australia.

It seems most likely that the 2016-17 rice season will be about normal, with top exporter India sowing 32.61 million hectares of rice for the season started in June, up from 30.47 million the prior year.

SHIFT IN MARKET DYNAMICS

The International Grains Council estimated on Aug. 25 that global rice production for 2016-17 would be 484 million tonnes, down on the prior month’s forecast of 487 million but up on the previous season’s 473 million.

Thailand expects to export about 9.5 million tonnes in 2016, and shipments in the first half of the year were up 12 percent on the same period last year, according to the Thai Rice Exporters Association.

The overall supply picture is one of comfortable volumes being available amid the ongoing selldown of high inventories in both Thailand and India.

On the demand side, top importer China hiked its purchases almost 23 percent from a year go to 2.141 million tonnes in the first seven months of 2016, according to customs data.

The main beneficiaries of the increase were Thailand, which boosted its exports to China in the January-July period by 31 percent to 555,993 tonnes, and Pakistan, whose sales rose almost 220 percent to 513,245 tonnes.

The Philippines, another major importer, is also increasing purchases, with the government planning to buy 1 million tonnes to secure supplies until next year while prices are low.

The current price weakness is also likely to tempt buyers in the Middle East and Africa.

Putting supply and demand together and rice looks more like a market responding to shifts in those dynamics.

This is a marked change from the politics-driven market of the previous years, and more likely a more healthy situation.

Yingluck, however, has defended her rice-buying scheme in her trial on charges of criminal negligence over her management of the subsidy system, which the military government says cost the country around $8 billion.

“We found that the rice policy could increase people’s income and the price of rice for farmers,” Yingluck told the Supreme Court north of the capital, Bangkok, during her trial on Aug. 5.

“It did not distort the market,” she said. “We saw that the benefits of the scheme outweighed the monetary losses.”

The scheme may well have provided a temporary boost to farmers, but Yingluck remains deluded if she thinks it didn’t distort the rice market.

Over N1bn worth of rice trapped in Cotonou warehouses

Over 50 million bags of imported rice, worth about N1 billion, are now trapped in various warehouses in Cotonou, Benin Republic, since the Federal Government began implementation of the ban on foreign rice in Nigeria.
Several importers who violated the government’s import restrictions are now biting their fingers as they can no longer push the imported commodities into Nigerian markets through the borders.
One of the importers told Daily Sun that many of them have lost their collaterals to the banks because they cannot service their loans.
“We have lost a lot. The banks are not giving us breathing space. They have confiscated all our belongings,” he said.
Daily Sun’s investigations revealed that the new Controller General of Customs (CGC), Colonel Hameed Ali, had threatened to discipline the Customs Area Controller in charge of Seme Border, Victor Dimka, if any grain of imported rice finds its way into the Nigerian market.
To demonstrate his seriousness, Ali, last week, signed an agreement with the Beninoise government to the effect that any ship from Benin ports must be escorted by the Benin Customs and handed over to Nigerian Customs. He threatened to stop trade relations with Benin Republic if the government continues to allow contraband goods into Nigerian markets.
This tough stance by the Nigerian government had pitted the importers against their bankers because most of the importers borrowed to import the goods. They had targeted the ‘ember’ months – the Eid el Kabir and Christmas festivities – to flood Nigerian markets with imported rice. The products, Daily Sun learnt, have been warehoused for over six months under an unwholesome condition, leading to deterioration in quality.
Recall that after the ban, Nigerian government had placed 70 per cent duty rate and 60 per cent levy on all banned 41 items as against Benin’s 5 per cent levy and 10 per cent duty rate on them.
On August 12, 2015, the Central Bank of Nigeria (CBN) issued a directive stopping some imported goods and services from the list of items valid for forex in the Nigerian Foreign Exchange Markets. This policy implies that those who import such items can no longer buy foreign currency from the official window to pay their overseas suppliers. This means they will have to source forex from the parallel market or Bureau de Change to pay for their imports.
But Daily Sun investigations reveal that the locally-produced rice is scarce in the market because the supply side cannot meet the demand.
To this end, a 40kg rice now goes for between N12,000 and 13,000.

Rice prices slide on Thai production recovery outlook

International rice prices have declined with higher output expected in Thailand following the end of a drought.

The export price of high-quality, long-grain Thai rice fell to $417 per ton in late August, the Board of Trade of Thailand said, about 13% lower than the roughly two-year high reached at the beginning of the month.

Prices for Thai rice had surged in the spring amid a drought in one of the world’s biggest exporters of the grain. The Southeast Asian nation was hit by a drought in 2015 as well.

But with the drought ending before summer, some experts predict the current crop will yield a harvest 10-20% larger than usual. Coupled with sluggish demand stemming from China’s economic slowdown, concerns of a rice oversupply have caused buyers in Asia to lose their appetite for bidding on the grain.

Global rice production in 2017 will grow 2% from this year’s estimate to about 480 million tons, the U.S. Department of Agriculture projects. With major exporters such as India and Vietnam also seen boosting foreign sales on an increase in production, the outlook for the rice market is bearish.

Japan’s agriculture ministry will conduct its first imported-rice auction of the fiscal year Sept. 7. The U.S. state of California has enjoyed a good harvest as well. Amid Japan’s rising domestic-rice prices, the decline in international prices could allow lower bids by the country’s trading houses and rice wholesalers.

Vietnam creates rice export competition for Thailand

Thailand’s rice export prices continue to decline 5% to 6% due to competition from Vietnamese rice, which is reportedly cheaper as its new-crop supplies are entering the market, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in a Aug. 23 report. Also, traders are awaiting the government’s upcoming rice stock tenders of around 1 million tonnes, which will be issued on Aug. 29-30.

The tenders will consist of 755,572 tonnes of 5% grade white rice (food grade for domestic and export markets) and 255,796 tonnes of broken white rice (A1 Super grade for industrial uses), which are carry-over stocks from the market year 2012-13 and market year 2013-14 pledging programs, the FAS said. Presently, export prices of old-crop 5% grade white rice is at $332 per tonne, which is 10% cheaper than those of current-crop white rice.

Thailand’s government said it is holding rice stocks of around 9 million tonnes of which 40% is industrial grade rice and the remainder is food grade rice. The government announced that it plans to completely sell off its old rice stocks during 2017, according to the FAS. The government also stated that new tenders during September–December 2016 mainly will be for industrial uses in order to prevent domestic rice prices from falling during the harvest period in the last quarter of this year.

Unofficial preliminary rice exports (excluding premium white and fragrant rice) for Aug. 15-21 totaled 78,411 tonnes, up 27,575 tonnes from the previous week and up 10,137 tonnes from the four-week moving average of 68,274 tonnes. Rice exports from Jan. 1–Aug. 21 totaled 2.241 million tonnes, down 13% from the same period last year, the FAS said.

NFA releases rice import terms

The National Food Authority has released the terms of reference (TOR) for its importation of 250,000 tons of milled rice on Aug. 31, signed by Cabinet Secretary Leoncio Evasco.
The NFA wants the entire volume to arrive and be deposited in various warehouses across the country by the end of October.
Of the total volume, two-fifths or 100,000 tons should have arrived by the end of September.

The NFA is buying from neighboring, state-run suppliers mainly in Thailand, Vietnam and Cambodia.
Southeast Asia is home to some of the world’s biggest exporters of rice as well as some of the biggest importers, including the Philippines.
Based on the TOR, the biggest tranche at 80,000 tons should be shipped to Manila, the National Capital Region being the biggest consumer of rice in the country.
About one-fifth—49,000 tons—of the latest batch of imports are bound for warehouses in Cebu City while 24,000 tons are going to Zamboanga City and 20,000 tons to Davao City.
Also, 16,000 tons each are going to the cities of Tabaco and General Santos; and 12,000 tons each to Batangas City and Subic in Zambales.
Further, 10,000 tons is going to Iloilo City; 6,000 tons to Legaspi City and 5,000 tons to San Fernando in La Union.
Earlier this month, Evasco was reported to have said he would propose to President Duterte the abolition of the NFA,
Largely because of the agency’s P167-billion debt, Evasco said the NFA was better scrapped or be relegated as a regulatory body without commercial stake in the industry.
Evasco took over the NFA along with three of the biggest agriculture-related agencies that used to be under the Office of the Presidential Assistant on Food Security and Agricultural Modernization which President Aquino created. Before that, the agencies were supervised by the Department of Agriculture.
The three other agencies are the National Irrigation Administration, Philippine Coconut Authority and Fertilizer and Pesticide Authority.
Agriculture Secretary Emmanuel F. Piñol had vied for the return of the these four agencies to the DA, and had even recommended to the President a list of appointees to lead the agencies.

Fresh demand from the Philippines expected to boost Vietnam’s rice exports

Vietnam is likely to win a deal to supply 250,000 tons of rice to the Philippines.
Vietnam is planning to bid for a 250,000 ton rice contract to the Philippines, said the Vietnam Food Association.

Vietnamese rice exporters are likely to submit offers at more competetive prices ranging from $360 to $365 per ton than their Thai rivals.

Experts said Vietnam looks set to win the contract for delivery of 250,000 tons, mostly 25 percent broken rice, to the Philippines.

There is no specific information on when the shipments are due to arrive.

The Philippines’s National Food Authority (NFA) plans to import 1 million tons of the staple grain in 2017 to fill stockpiles.

The NFA, which ensures the country’s food security, said it is also looking to buy up to 750,000 tons of well-milled long-grain white rice through government-to-government deals to build up stocks.

Countries with existing supply agreements with the Philippines such as Thailand, Vietnam and Cambodia are qualified to submit offers.

Vietnamese rice exporters said the fresh demand from the Philippines could boost export prices, which have been under pressure from weak market demand since the second half of this year.

Over the January-August period, Vietnam’s rice exports fell 16.6 percent on-year to 3.37 million tons, according to data released by the Ministry of Agriculture and Rural Development.

Thin demand and rising supplies have also driven down Vietnam’s export prices.

Vietnam’s rice exports in the same period were down nearly 13.1 percent from a year ago at $1.51 billion, according to the ministry.

China remains Vietnam’s biggest customer for the staple grain, accounting for 36 percent of Vietnam’s exports over the first eight months of the year.

However, China’s purchases of Vietnamese rice were down about 21.6 percent from a year ago in July at 1.04 million tons.

The Philippines, one of the world’s biggest rice buyers, imports about 1 million tons or more of the staple grain each year to bolster stockpiles that can be severely depleted by adverse weather conditions and natural calamities.

The Philippines is hit by 20 typhoons on average each year, mostly during the second half of the year.

Threat of minimum export price for rice

RIce HQ

The Commerce Ministry has threatened to impose a minimum export price for rice shipments to stop any further price swings caused by manipulations and price wars among traders.

Chutima Bunyapraphasara, the permanent secretary for commerce, said exporters and millers have provided false information with negative outlooks for the industry.

Many of them offered low export sale prices to buyers, prompting significant rice price swings, she said.

“I do not understand why they give such negative outlooks for rice prices as global rice output is on the decline,” said Ms Chutima.

She said rice stocks in India are expected to total 16 million tonnes, a nosedive from earlier estimates of 25 million. Vietnam cut its export target this year to 4.75 million tonnes from 6.5 million. The two countries are major rice export rivals to Thailand.

Buyers such as the Philippines and Indonesia are projected to import more rice this year, which should drive up Thai rice prices.

“If traders continue to provide false information and negative outlooks to affect domestic rice prices, some measures will be imposed,” said Ms Chutima.

Over the past two weeks, prices of paddy have dropped sharply by about 2,000 baht a tonne in line with negative news. Prices of 15% grade white rice paddy fell to between 8,400 to 9,000 baht a tonne, from 10,000 baht.

The drop came even though new harvests from the 2016/17 main crop have yet to be supplied to the market.

Ms Chutima estimated new supply from the main crop is unlikely to meet the estimate, at only 27.7 million tonnes of paddy.

She said the government has already prepared 17 measures worth over 10 billion baht to help farmers and absorb the new supply during the harvest.

The government’s ongoing rice sales are unlikely to affect rice market prices as the grains in state stocks are mostly old, said Ms Chutima.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, agreed with the ministry’s threat of a minimum export price but doubts whether the measure will be effective enough to deal with price speculation.

He said there were other factors that caused falling market prices besides price manipulation by rice traders.

Mr Chookiat said China’s abundant rice output and the tendency of international markets to buy smaller volumes of rice this year is one major factor. In addition, the recent announcement by the Philippines that it would buy a lower volume of rice than expected, some 250,000 tonnes, is another factor affecting Thai rice prices.