NEW DELHI (Commodity Online) : Global rice markets remained highly volatile despite second largest rice producer reentered with two million tons of rice.
Global rice prices climbed sharply last month after Thailand began pledging prices as part of an election promise by the current ruling party Pheu Thai.
The Thai government's pledging plan aims to pay 15,000 baht a tonne for paddy rice and 20,000 baht a tonne for Hom Mali rice, pushing up export prices to more than $800 a tonne from $550-560 a tonne for white rice now, which will put a big dent in Thai competitiveness.
The world’s largest rice exporter also announced curtailment in shipments. The southeast Asian nation palnned to export around 8 million tons of rice next year compared to 10 million tons this year.
Thailand and second largest exporter Vietnam control about half of the world's rice trade, which will likely be 31.85 million tons in 2012, down from 32.74 million.
India’s reentry with non basmati rice has helped cool prices marginally but China and country’s like US are to supply more to ease things off, analysts said.
India's prices were around $500 a ton while Thailand’s prices are as high as about $650 a ton.
India needs to add an additional two million tons to bring back prices and it can easily afford that as the country is struggling with its overflowing stockpiles, they added.
Lower supply forecasts by UN Food and Agriculture Organization also attributed to rice price hikes as the FAO food index dipped to 231.1 points in August, down less than a point from July, still only 3 percent below an all-time peak hit in February.
