Increased rice production by India & rice importing countries pose danger for Thai world rice market leadership.
AGRICULTURE: Exporters call for review of rice prices as glut looms by Phusadee Arunmas
Rice exporters are urging the government to reconsider pricing under the rice mortgage scheme now that the global market has changed.
Failing that, Thailand will risk losing its long-held status as the world's top exporter if it only ships 6.5-8 million tonnes excluding grain sold by the state this year, they warned yesterday.
Korbsook Iamsuri, president of Thai Rice Exporters Association, said if India exports more than 2 million tonnes of rice, Thai exports would drop to 6.5 million tonnes - 3 million tonnes of white rice, 1 million tonnes of parboiled rice, 2 million tonnes of Thai Hom Mali rice and the rest other types.
But if India exports only 2 million tonnes, Thailand will be able to increase its sales to 8 million tonnes.
The projection did not include government exports, so released stock will influence figures.
The US Department of Agriculture projected the global rice trade this year would total 31.88 million tonnes, down from 34.78 million in 2011 due to a reduction in imports by major markets (see chart). The major reason is rising local production in importing countries, up to 461.4 million tonnes this year from 450.4 million tonnes in 2011.
The latest projection cut Thai rice exports to only 7 million tonnes in 2012, down from 8 million predicted in August and much lower than the 10.5 million tonnes it shipped last year.
Thai rice prices are also the highest in the world, further eroding the country's competitiveness. Therefore, the association wants a revision of the paddy mortgage scheme, which widens the gap of Thai rice and that of its competitors by at least US$100 a tonne. Thai 5% white rice is now at $533 a tonne while Indian rice is $435.
Under the mortgage scheme, white paddy price is guaranteed at 15,000 baht a tonne or more while the minimum for fragrant paddy price is 20,000 baht.
Chookiat Ophaswongse, the TREA's honorary president, said while Thailand commands one-third of the global market, its share is not big enough to dictate the global prices.
Rice is not a commodity like oil because supply can increase in line with prices. Thailand may see a record high of 12 million tonnes this year of second-crop paddy due to sufficient water.
"If Thailand exports only 6.5 million tonnes of rice, the value would be cut by approximately 60 billion baht from 200 billion baht in 2011," he noted.
Sermsak Kuonsongtum, a TREA vice-president, said the policy revision is necessary as the situation has changed with India aggressively exporting its grain.
Meanwhile, Commerce Minister Kittiratt Na-Ranong stood firm on the mortgage price policy as production this year would be lower than in 2011 due to floods while global demand is close to the world's supply.
"The government is confident high-quality Thai rice will sell. We will continue to sell rice on the government-to-government basis. The floods have damaged a large amount so why don't exporters use this to increase the bargaining power?" he said.
He added the mortgage would stand for second-crop paddy but gave no price.
(Source: Bangkok Post, AGRICULTURE, Exporters call for review of rice prices as glut looms, 17/01/2012, Phusadee Arunmas, link)
Rice Industry Vocabulary
glut - over supply, whjen there is too much of some good being sold in the market
looms - likely to happen soon
glut looms - an oversupply of the good is likely soon
reconsider - to think again about a decision in order to decide whether you should change it พิจารณาอีกครั้ง
reconsider pricing - think again about the prices (for selling rice now)
mortgage - a legal agreement in which you borrow money from a bank in order to buy a house, build something, develop a piece of land, etc.การจำนอง
scheme - a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ
rice mortgage scheme - the government system for paying farmers a price that is greater than the market price for their rice (meant to protect them against the possibility of low prices at the time they harvest their rice and have to sell it)
Rice exporters are urging the government to reconsider pricing under the rice mortgage scheme
global - all over the world, including the whole world; throughout the world ทั่วโลก
global market - the market for a good (including the whole world)
risk - danger, how likely or possible it is for a bad event that causes harm and damage ความเสี่ยง
status - the situation at a particular time; the state of affairs at a particular time; the state or condition at a point in time สถานะ official or legal position สถานภาพ
long-held status - a situation that has existed for a long time
Thailand will risk losing its long-held status as the world's top exporter
X excluding Y - all of X but not including Y
grain - the seed from cereal crops such as rice, wheat, or corn เมล็ดพืช
state - government รัฐ
excluding grain sold by the state
parboiled rice - rice that is boiled until partially cooked ข้าวต้มสำเร็จรูป
project (verb) - expect, forecast; the amount that experts believe (forecast) for the future; guessing a future amount; a calculation or guess about the future based on information that you have การคาดคะเน
the projection did not include government exports
released - made available to the public
stock - an amount of something that you keep so that you can use it when you need it ที่เก็บไว้ในสต๊อก
released stock - the amount that the government has allowed to leave the warehouse to be sold to the government
influence - the power to have an effect on people or things อิทธิพล
figures - statistics, numbers describing the economy
influence figures - change the amount (cause some change in the amount)
released stock will influence figures
trade - the buying and selling of goods การค้าขาย
global rice trade - the buying and selling of rice all over the world
chart - information given visually, with a line going up and down, for example; a graphical representation of data (can seen with eyes instead of reading article) (See Wikipedia)
(see chart) - look at chart to see this (what was just discussed or mentioned)
the US Department of Agriculture projected the global rice trade this year would total 31.88 million tonnes (see chart)
reason - an explanation of an event, why an event happened เหตุ ; เหตุผล ; สาเหตุ
major reason - the biggest or most important reason
local production in importing countries - countries that import a good, but also make the good in the country (which is replacing and reducing imports from other countries)
the major reason is rising local production in importing countries
competitiveness - how well a business can do compared to other firms (does it have lower price or higher quality? is it able to maintain or gain customers in a market?) การแข่งขัน
erode - 1. reduce; 2. when water slowly washes dirt away from the side of a hill or mountain
eroding the country's competitiveness
revision - a change, improvement or addition that someone makes to something like a plan or document การปรับปรุงใหม่, การแก้ไขใหม่
paddy - rice after it has been harvested from the field ข้าวเปลือก
paddy mortgage scheme
revision of the paddy mortgage scheme
gap - a large difference between things ช่องว่าง
revision of the paddy mortgage scheme, which widens the gap of Thai rice and that of its competitors by at least US$100 a tonne
fragrant paddy price - Thai Hom Mali rice
Thai Hom Mali, jasmine fragrant rice - a long-grain variety of rice that has a nutty aroma and subtle flavor (See Wikipedia) ข้าวหอมมะลิ
guaranteed - will happen for sure (promises have been given)
under the mortgage scheme, white paddy price is guaranteed at 15,000 baht a tonne or more while the minimum for fragrant paddy price is 20,000 baht
share (verb) - to have or use something at the same time as someone else ใช้ร่วมกัน
share (noun) - the amount of something that one person has (other people also have some)
dictate - to influence or control how something ควบคุม บงการ
dictate global prices - control or set prices for the good around the world
while Thailand commands one-third of the global market, its share is not big enough to dictate the global prices
commodity - a good such as oil, coffee, cotton, metal and some grains, that can be bought and sold in large quantities (each unit such as one kilogram or liter of a good is the same, so has same price no matter which company produces it, no product differentiation possible) (See Wikipedia)
in line with - following, moving in the same direction as
X in line with Y - X moving with Y, X following Y
supply can increase in line with prices - prices and supply can increase at the same time (because different kinds of rice are different goods, with different levels of quality and different tastes; a commodity is one good and the price of a good always decreases as the supply increases all things remaining the same (ceteribus paribus), this is called the law of supply and demand
rice is not a commodity like oil because supply can increase in line with prices
record - the best or most ever achieved สถิติ
record high - the highest level
sufficient - enough พอเพียง
sufficient water - enough water
Thailand may see a record high of 12 million tonnes this year of second-crop paddy due to sufficient water
policy - a set of plans or action agreed on by a government, political party, business, or other group นโยบาย a plan of action to guide decisions and achieve outcomes (See Wikipedia)
policy revision - changing a policy
aggressively - done with great energy and intensity
the policy revision is necessary as the situation has changed with India aggressively exporting its grain.
firm - not change, stay the same, not move
stood firm - not change your decision or opinion about something
demand - the need and desire to buy goods and services by households and businesses
global demand - the demand for a good all over the world
the Commerce Minister stood firm on the mortgage price policy as production this year would be lower than in 2011 due to floods while global demand is close to the world's supply
confident - being certain of your abilities or of having trust in people, plans, or the future มั่นใจ
the government is confident high-quality Thai rice will sell.
on a government-to-government basis - doing something between two governments (not between companies or government and companies)
we will continue to sell rice on a government-to-government basis
bargaining - try to get a better deal from someone (for example, a better price for something you want to buy)
bargaining power - the ability to get a better price and deal (when buying something)
increase bargaining power - improve your ability to get good prices when buying things
the floods have damaged a large amount so why don't exporters use this to increase the bargaining power?
stand - remain the same
would stand - will remain the same in the future
the mortgage would stand for second-crop paddy but gave no price