ID :
191594
Tue, 06/28/2011 - 15:13
Auther :
Shortlink :
https://oananews.org//node/191594
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THAI POLLS OUTCOME MAY SPIKE RICE PRICE
KUALA LUMPUR, June 28 (Bernama) -– The price of rice in the region
benchmarked against Thailand’s may spike if the country’s opposition party, Pheu
Thai, which favours higher rate for the grains wins the Sunday poll.
Yingluck Shinawatra, who is leading the favoured party and expected to be
named as the first woman Prime Minister in Thailand, plans to restore a policy
introduced by her elder brother, former Thailand Prime Minister, Thaksin
Shinawatra, to buy unmilled rice at 15,000 baht (RM1,500) per metric tonne,
twice higher than the current price.
"If she wins, it will pressure regional players to increase the price as
she is supportive of unmilled rice priced at 15,000 bahts,” said Bakry Hamzah,
group managing director of Padiberas Nasional Bhd (Bernas), which manages 60 per
cent of rice supply in Malaysia.
A survey of eight rice millers and traders by a newswire revealed the
increase in milled rice price will raise costs for exporters and boost the
price of shipments to about RM2,287 per metric tonne from RM1,525 per metric
tonne.
Malaysian paddy farmers will also demand for better price for their grains
as they will always benchmark their rice against Thailand’s, he told reporters
after Bernas’ holding company, Tradewinds (M) Bhd, annual general meeting.
Currently, Bernas imports one million tonnes of rice a year, of which, 50
per cent comes from Vietnam while the rest are from Thailand, Pakistan and
Cambodia.
At any point of time, Bernas, which has 31 rice mills and 40 warehouses, has
292,000 tonnes rice reserves.
“The (outcome of Thailand's elections) is the only bullish factor for the
price of rice other than that everything else is stable,” he said, adding that,
Bernas is looking at upgrading selected rice mills nationwide.
Bakry said the Rome-based Food and Agriculture Organisation (FAO) has
forecast a yield increase of three per cent from 2001 to 2012, which translates
to another 720 million metric tonnes of rice production globally, which is 21
million metric tonnes higher than 2010.
“So there is ample supply. India is also having a good monsoon and they are
expecting a bumper harvest, which means supply is sufficient,” he said.
Reviewing the operations, Bakry said last year, firmer rice supply globally
resulted in a drop in the international market price for rice which is in stark
contrast to the significant increase in the other major food grains such as
maize and wheat.
The volume of rice sold by Bernas last year grew marginally by 1.6 per cent
to 1.33 million tonnes compared with 1.31 million tonnes sold in 2009.
However, revenue dropped to RM3.2 billion in 2010 from RM3.25 billion in the
previous year, as a result of a reduction in sales price.
He also said despite the seven per cent drop in the overall national
paddy production caused by floods and diseases, Bernas' share of local paddy
purchased increased to 32.2 per cent in 2010 from 30.8 per cent in 2009.
As for the rice subsidy programme for the poor, dubbed "Subur", Bakry said
Bernas was not sure when exactly the government intends to start the targeted
subsidy.
He said once implemented, Subur will only go to the hardcore poor
nationwide and will help the government halve its subsidy bill for rice from a
whopping RM60 million a month currently.
However, this will not impact Bernas in any way as the subsidy is based on
the government compensating the millers and Bernas the cost of production.
“For example, if the subsidised rice is actually sold by us at the wholesale
level at RM1,350 a tonne, our cost is actually RM2,150 then the difference is
compensated by the government,” he explained.
Asked if Bernas would increase its imports from Cambodia, Bakry said the
country was one of the potential suppliers, but poor logistics and
transportation has been one of the stumbling blocks.
Besides that rice from Cambodia is relatively costlier and poor in quality
as compared with Vietnam.
He said rice from Cambodia was pricier as it gets tax exemption of 150 euros
for a metric tonne from the European Union, which makes more sense for them to
export there as compared to within Asia.
“In terms of quality it is the lowest among the three (Thailand, Vietnam and
Cambodia). After polishing the content of broken rice is higher between 17 and
20 per cent, whereas Vietnam’s is slightly lower than that,” he said.
“We are working with Cambodian millers to improve the quality and match the
demand of our local wholesalers,” he added.
-- BERNAMA
benchmarked against Thailand’s may spike if the country’s opposition party, Pheu
Thai, which favours higher rate for the grains wins the Sunday poll.
Yingluck Shinawatra, who is leading the favoured party and expected to be
named as the first woman Prime Minister in Thailand, plans to restore a policy
introduced by her elder brother, former Thailand Prime Minister, Thaksin
Shinawatra, to buy unmilled rice at 15,000 baht (RM1,500) per metric tonne,
twice higher than the current price.
"If she wins, it will pressure regional players to increase the price as
she is supportive of unmilled rice priced at 15,000 bahts,” said Bakry Hamzah,
group managing director of Padiberas Nasional Bhd (Bernas), which manages 60 per
cent of rice supply in Malaysia.
A survey of eight rice millers and traders by a newswire revealed the
increase in milled rice price will raise costs for exporters and boost the
price of shipments to about RM2,287 per metric tonne from RM1,525 per metric
tonne.
Malaysian paddy farmers will also demand for better price for their grains
as they will always benchmark their rice against Thailand’s, he told reporters
after Bernas’ holding company, Tradewinds (M) Bhd, annual general meeting.
Currently, Bernas imports one million tonnes of rice a year, of which, 50
per cent comes from Vietnam while the rest are from Thailand, Pakistan and
Cambodia.
At any point of time, Bernas, which has 31 rice mills and 40 warehouses, has
292,000 tonnes rice reserves.
“The (outcome of Thailand's elections) is the only bullish factor for the
price of rice other than that everything else is stable,” he said, adding that,
Bernas is looking at upgrading selected rice mills nationwide.
Bakry said the Rome-based Food and Agriculture Organisation (FAO) has
forecast a yield increase of three per cent from 2001 to 2012, which translates
to another 720 million metric tonnes of rice production globally, which is 21
million metric tonnes higher than 2010.
“So there is ample supply. India is also having a good monsoon and they are
expecting a bumper harvest, which means supply is sufficient,” he said.
Reviewing the operations, Bakry said last year, firmer rice supply globally
resulted in a drop in the international market price for rice which is in stark
contrast to the significant increase in the other major food grains such as
maize and wheat.
The volume of rice sold by Bernas last year grew marginally by 1.6 per cent
to 1.33 million tonnes compared with 1.31 million tonnes sold in 2009.
However, revenue dropped to RM3.2 billion in 2010 from RM3.25 billion in the
previous year, as a result of a reduction in sales price.
He also said despite the seven per cent drop in the overall national
paddy production caused by floods and diseases, Bernas' share of local paddy
purchased increased to 32.2 per cent in 2010 from 30.8 per cent in 2009.
As for the rice subsidy programme for the poor, dubbed "Subur", Bakry said
Bernas was not sure when exactly the government intends to start the targeted
subsidy.
He said once implemented, Subur will only go to the hardcore poor
nationwide and will help the government halve its subsidy bill for rice from a
whopping RM60 million a month currently.
However, this will not impact Bernas in any way as the subsidy is based on
the government compensating the millers and Bernas the cost of production.
“For example, if the subsidised rice is actually sold by us at the wholesale
level at RM1,350 a tonne, our cost is actually RM2,150 then the difference is
compensated by the government,” he explained.
Asked if Bernas would increase its imports from Cambodia, Bakry said the
country was one of the potential suppliers, but poor logistics and
transportation has been one of the stumbling blocks.
Besides that rice from Cambodia is relatively costlier and poor in quality
as compared with Vietnam.
He said rice from Cambodia was pricier as it gets tax exemption of 150 euros
for a metric tonne from the European Union, which makes more sense for them to
export there as compared to within Asia.
“In terms of quality it is the lowest among the three (Thailand, Vietnam and
Cambodia). After polishing the content of broken rice is higher between 17 and
20 per cent, whereas Vietnam’s is slightly lower than that,” he said.
“We are working with Cambodian millers to improve the quality and match the
demand of our local wholesalers,” he added.
-- BERNAMA
