Obvious

Schocking
Probably the most important news this month is the report published by GRAIN conerning issues of land grab. 
With the increased agricultural prices of the last few years, land grabbing has become a pandemic which seems to be never-ending. From the summary:

'Despite the inherent shortcomings of the data, we feel confident in drawing six major conclusions:

1. The vast majority of farms in the world today are small and getting smaller
2. Small farms are currently squeezed onto less than a quarter of the world's farmland
3. We are fast losing farms and farmers in many places, while big farms are getting bigger
4. Small farms continue to be the major food producers in the world
5. Small farms are overall more productive than big farms
6. Most small farmers are women.

Many of these conclusions might seem obvious, but two things shocked us. One was to see the extent of land concentration today, a problem that agrarian reform programmes of the 20th century were supposed to have solved. 
... 
The other shock was to learn that, today, small farms have less than a quarter of the world's agricultural land ...'. 

The report is a damning of current policies driving farmers off their land, mostly for the acquired land to be distributed to wealthy investors who struggle to meet the efficiencies of those farmers who have been displaced. When, if ever, will this stop?

Pay-back

With prices for rice dropping, inevitably victims are falling. 

Victim 1? Apparently the Cambodian company named Megagreen Imex Cambodia was in line for fame and especially fortune in the nation's rice export dream. Phnom Penh Post (Jun. 6):

'In December 2011, the managing director of Megagreen Imex Cambodia, Renne Outh, proudly announced that his firm had inked a $21 million deal to be the first to ship Cambodian rice to the Philippines.

Nearly two and a half years on, not a single Cambodian grain has reached Manila. Export figures for the first five months of 2014 show that Megagreen, once among the top 10 rice exporters in the country, has fallen to 48th out of 84.

The failed Philippines deal marks a pattern of broken promises, as the agricultural wholesaler now finds itself besieged by creditors and lawsuits seeking damages in excess of $1 million, with flawed agreements from one end of the supply chain to the other'.

Lower prices have meant that Cambodia's rice millers are left with unsold produce. And supposedly banks with unpaid loans. Phnom Penh Post (June 18) hints why:

'Cambodian rice currently trades at $440 per tonne. Meanwhile, rice in Thailand and Vietnam is selling for $385 per tonne and $405 per tonne respectively.

With the next harvest season due to begin in just three months, Lim Bun Heng, chairman of rice export firm Loran Group, said that millers had been pressuring his company to find buyers for Cambodian grain.

...

A rice mill owner, who asked not to be named for fear of damaging his business’s reputation, said that he had more than 2,000 tonnes of rice waiting for a buyer in Battambang province.

The mill owner added that he had accrued over $400,000 worth of bank loans to buy the rice off local farmers in the hope of selling it on to exporters for overseas markets.

“To pay back the bank only, I am forced to sell the paddy off at a lower price than what I bought it for,” he said'.

Expect the bill for these losses to be passed on to farmers come next harvest 

Another loser in the making? Vietnamnet reports (June 6) on the countries dealings with the Philippines: 

'Vinafood 1 and Vinafood 2 have been severely criticized for offering overly low bids in an effort to obtain the contract with the Philippines. Analysts believe that Vietnam made a major mistake when analyzing the situation, which then led to the wrong decision. Tuan of Thinh Phat [company] pointed out that Thailand was the major rival of Vietnam in the bid for the rice export contract because it was nearer to the Philippines than India and Pakistan, which allows savings on transportation costs. However, Tuan said Thailand should not have been considered a threat to Vietnam. NFA said that the Philippines would only accept rice harvested no earlier than four months ago. Thailand stopped collecting rice in February 2014. “This means that Thailand only had rice harvested in 2012 and 2014, and that Vietnam was the only seller in the market,” Tuan said'.

Re-wiring

The rice pledge scheme in Thailand. As it's now being wrapped up by the junta, there are a few articles concerned. first, the Nation (May 25) mentions that 

'The ousted government was able to pay about Bt100 billion to the farmers until now, but another Bt90 billion is still owed to 80,000 farmers'. 

The only reason for the outstanding amounts not to be made was that the prevoius government was a caretaker government. Luckily the junta has no law to uphold so can do as it pleases. Another PR activity.

The Bangkok Post (May 26) however mentioned that farmers were happy (who isn't nowadays?) as stalled payments were now being paid.

Thai farmers now having been paid, want new handouts. So mentions the Bangkok Post (June 2): 

'Songpon Poonsawat, chairman of the Council of Farmers in Ang Thong province, said his organisation would propose short-term assistance packages for the NCPO [the junta] to consider, to help farmers suffering as a result of lower prices. Mr Songpon suggested the intervention be carried out for the next two crops, until the market price of rice returns to normal'.  

But what is normal?

Then some confusing news. The Nation (June 5) has a short item on the end of the rice-pledging scheme: 

'Former Democrat MP Warong Dechgitvigrom Thursday called on the National Council for Peace and Order to end the controversial rice-pledging scheme'. 

It has already ended.

'He said the NCPO should replace the scheme with a rice price guarantee'. 

In other words: a rice pledging scheme!

And on June 8, farmers came up with a new proposal (Nation): 

'Rice farmers yesterday proposed that the National Council for Peace and Order set a price for rice based on the average production cost plus a 40 per cent profit margin so they can survive'. 

That also looks like a rice-pledging scheme. The Bangkok Post notes (June 10) that the military are unsure what to do. Going by previous experiences they fail to take decisions unless you criticize them... They prefer to shoot the messenger of bad news.

The junta has spoken and there will be a new subsidy scheme. The Bangkok Post (June 18): 

'Gen Chatchai said that participants agreed with the idea of a "cultivation subsidy" and soft loans for rice growers nationwide in the 2014/2015 crop season. The subsidy was set at 500 baht per rai (1,600 square metres) for up to 15 rai (24,000 square metres) per family, based on rice growers' estimated cultivation costs of about 4,000 baht per rai'.

One problem will be the way the subsidies will be doled out, probably through subsidies to ag input sellers. While there may be limitations on hand-outs per family, there will be all of a sudden be a lot more families in Thailand ....

Top dog
The bargain sales have resulted in Thailand returning to the top of the rice exporting nations. The first five months of this year have seen this sale recapture the buyers spirits and Thailand is yet again the no. 1 exporter in terms of tonnage. Bangkok Post (June 4): 

'Somkiat Makcayathorn, secretary-general of the Thai Rice Exporters Association, said on Wednesday that from Jan 1 to May 20, 2014, Thailand exported a total of 3.93 million tonnes, surpassing India (3.74 million tonnes) and Vietnam (2.4 million tonnes) in the same period'.  

Hurrah! Back to no. 1. But why obsess with who is no. 1? Surely it should be the income generated for the nation which should count. The article continues to assist the junta's PR machine: 

'The fall happened when the Yingluck Shinawatra government increased the price of Thai rice through its loss-ridden rice-pledging scheme, which promised over-market  prices to farmers. Many were never paid'. 

It appears that the exporters and general traders and millers are the ones cheering. Farmers are a lot more quiet ...

Meanwhile, Channelnewsasia (June 4) reports on the Thai Rice Exporters Association's prediction of a 20% rise in exports for Thailand this year.

Est
The Bangkok Post has the story on the losses of the old rice-pledging scheme (May 28): 

'Estimated losses from the previous five crops under the Yingluck Shinawatra government’s rice-pledging scheme could be lower than 500 billion baht, says the Finance Ministry'. 

Or 15 billion US$! Inflation? PR? Hmmm, ...

The previous government and their sceme (-ing?)? They should be tried: 
* loss of nearly 3 million tonnes (swept under the carpet?), 
* poor quality and 
* failure to calculate what the loss was. 
The Bangkok Post (June 10) reports that the former government want a quick resolution on the charges. As everything is in a flux, there probably can't be any conviction unless one based on politics.

As Thailand has no clue as to what they have stockpiled in the past it comes as no surprise that the Bangkok Post reports (June 13) that an audit will take place. We also know that the audit will find less rice than expected ...

National affairs

The Cambodia Daily (June 3) sees the positives in a 1% rise in rice exports from Cambodia. Quite confusing as it also mentions rising imports to or from Thailand?

But ..., the problems in Thailand have had an impact on Cambodian direct exports to Thailand. They have nearly disappeared, so reports the Phnom Penh Post (May 29).

Real growth lies elsewhere. Via Phnom Penh Post (May 19) it is reported that Cambodian organic rice is finding a market in Hongkong:

'While the US and Germany have traditionally been the key markets for Cambodian organic rice, with about 300 tonnes sent there last year, CEDAC president Yang Saing Koma told the Post that his organisation has exported 30 tonnes to Hong Kong this year, as the market for the Kingdom’s natural produce expands'.

With rice losing favour, the rural sector is losing a taste for alternatives. The Cambodian Daily (May 27) notes that cassave exports are also down:

'Cassava exports dropped by about $25 million during the first four months of 2014 compared to the same period last year, according to figures provided by the Ministry of Commerce on Monday.

From January to April this year, Cambodia exported 203,934 tons of cassava, worth about $13 million, the figures show. In the corresponding period last year, 273,415 tons, worth about $38 million, were exported'. 

A typical double whammy: lower prices and less production. This contrasts heavily with black pepper. Cultivated in patches near the coatsal towns of Kep - Kampot as well as near Kampong Cham, production was on the up, so reported the Phnom Penh Post (May 27):

'Kampot pepper has the WTO’s geographical indication (GI) status linking the quality of the product to its origin. Exports and prices have been on the rise since receiving the status in 2010.

The total cultivated area of GI Kampot pepper reached 90 hectares this year, twice that of 2013 – but it will still be years before many of these plants mature and are ready for harvest.

Him Anna, a pepper farmer in Kampot, told the Post that she had exported 3 tonnes of pepper this year and the market was hungry for more. “There is huge demand in the market with a very good price, but until now we still have a problem with supply.”' 

Let's just hope that prices remain attractive and markets can deal with the upsurge in acreage from Cambodia. It remember that the Malaysian state of Sarawak had the intention of cornering the pepper market, however expansion didn't reap rewards.

Well with farmers being caught with increased corporisation, they are now urged to go green, so reports the Phnom Penh Post (May 23): 

'Officials from the Ministry of Agriculture have called on farmers to cease using chemical pesticides and adopt environmentally friendly methods in an effort to increase yields and reduce damage to produce. Hem Em, a farmer with 7 hectares of pepper-growing land in Kampong Cham, said he had spent more than $300 on pesticides this season to ward off pests.

“If we do not use pesticide, we will not be able to harvest crops because the insects destroy the flower and our crops give no fruits,” he said'.

It wouldn't hurt if green produce was paid more, but that's probably not the message.

Founding father
The Phnom Penh Post (May 23) on the new Cambodian Rice Federartion (CRF). An interview with  CRF’s newly elected president and CEO of SOMA Group, Sok Puthyvuth. Some of the Q and A's:

'How is your rice body going to represent farmers?
This is the foundation of the rice sector. If the foundation is not strong, forget about the millers or exporters.

One of our major priorities is to really look at the foundations of the sector, how have the farmers been doing? Whether the access to all this support, like finance, fertiliser or techniques are up to date? 

...

Your father is the deputy prime minister. Have your family ties helped you land the CRF job?
I am the new generation. You could say it is a coincidence that I happen to be in this position, but it was not appointed. We went through an election. I don’t think people voted for me because of who I am. If they feel that I am someone who doesn’t know what I am talking about, I don’t think they would have voted for me'.

An earlier article by Phnom Penh Post (May 20) also noted that his father-in-law is the PM himself ..., so that might help, certainly with the election process. It also noted that all other industry bodies would be dissolved ...

The Phnom Penh Post (May 30) has an interesting coverage of a rice industry workshop:

'The rice industry's quest for greater quality at lower cost reached a dead end yesterday at a conference in Phnom Penh, with exporters and farmers polarised on how to achieve greater returns for the industry.

The workshop, titled "Improving Rice Value Chain and Enhancing Farmers’ Livelihoods", was attended by more than 70 farmer representatives, businesses and government officials. On one side exporters want farmers to provide a better-quality rice grain, but on the other, farmers cannot afford the premium to pay for the higher-quality seed ... Kan Vesna, a farmers representative from Battambang province, rebutted the millers concerns, saying millers systematically reducing prices across the industry created little incentive for farmers to improve their crops'.

With prices dropping and companies feeling the pinch, no doubt lower prices for farmers will be the indiustry's answer to their problems (passing on the buck).

The Cambodian Daily comes with a farmer based article (May 30) concerned with the same workshop:

'Cambodia’s rice farmers are being neglected amid the government’s push to ramp up exports of milled rice to one million tons by the end of next year, a goal that will only be reached with improved cultivation, agriculture experts and farmers said Wednesday at the Royal University of Phnom Penh'.

Mitigating

The World Bank has some bad news: world food prices are going up (source). We never see this sort of alarmist news when prices are dropping (though we never notice it in the shops  ..., lower prices mean more profit for end-use companies ...). The price rise is lead by rises in wheat and maize, due to political instability in Ukraine and wider implications of the conflict. Only rice prices were dropping ... The report also notes: 

'Food price shocks can both spark and exacerbate conflict and political instability, and it is vital to promote policies that work to mitigate these effects'. 

The only way forward is to reverse policies on creation of national reserves. For years the World Bank has been advocating selling of strategic stocks thus exacerbating price rises! Another hmmmm

World prices seem to be on the drop at least in the short term. India has announced to offload it's reserves on the internal market so as to drive down prices and thus inflation (source). But that means less exports further on down the road and eventually higher prices.

King

Meanwhile farmers are proving to spoil local markets in Laos. According to Vientiane Times (May 23):

'The price of rice in the markets of Borikhamxay and Luang Namtha provinces increased 500 kip per kilogram this week, while staying the same in most other provinces. The price rise is believed to be caused by some farmers stocking their rice to consume through the wet season, causing a shortage in the markets'. 

Oddly the article features no official response to the price rises. Are Lao farmers king? 

Acknowledging

Forthcoming for the rice market is the political crisis looming in Thailand. Events being played out seem to suggest that a political status quo is not on the offering and any change will most likely see the rice pledging scheme shelved or changed dramatically.

What will occur is a downward push on global prices. Thai rice exports will restart on market conditions leading to an overall price drop; there's simply too much rice stocked at the moment and the malfunctioning of the Thai exports has made many a country see their own possibilities in exporting rice. 

And buyers can safely turn to other countries to satisfy their demands.

The Nation (Dec. 2), nearly a month ago has it's idea's on the future ahead for the rice pledge scheme: 

'There were signs the government wanted to back away from the policy, or at least scale it down. But politics came into play and the most ambitious pledges to the farmers were maintained.' 

So they suggest taking it off the agenda and letting experts suggest improvements.

Cambodia's mixed bags

Let's leave the Thai politics aside and concentrate on Cambodia. Their rice exports in particular.

Cambodian nascent rice exports to Europe are in hot water. Claims are made that up to 30% of the exports are in fact of Vietnamese origin (Oryzae, Dec. 19). 

Provenance, such an important aspect of the global trade rules affects many an agricultural item in the lower Mekong where age old trading routes don't necessarily follow modern day borders. Many an agriculture item moves over the border  especially to Thailand with it's higher prices and to Vietnam with it's more aggressive exporting strategy. 

So it's no surprise that cheaper Vietnamese rice might make it s way towards Vietnam, likewise Cambodian rice heads to Thailand.

But Cambodian exporters are refuting the claims (Cambodia Daily, Dec. 23): 

'Van Vichet, the deputy secretary of ARPC (Alliance of Rice Producers and Exporters of Cambodia) , said that while the association had agreed to create a code of conduct, it denied Cambodian rice was being contaminated before being exported to Europe.

He said that the accusation was the political result of recession-stricken rice farmers from European countries lobbying E.U. officials to reintroduce tariffs for rice imported into Europe'. 

Deny, shift the blame (link to Oryzae article, Dec. 17, with some European nations complaining about imports but with no substantiation).

And: 

'Commerce Ministry spokesperson Kong Putheara agreed with Mr. Vichet’s rejection and said that any tests of Cambodian rice exports to the E.U. would confirm that the rice is all grown locally.

“What factors have the E.U. based this claim on that 30 percent of rice exports from Cambodia contain rice from Vietnam? Have they looked at the DNA or have they looked at other factors?” he asked.

Mr. Putheara acknowledged, however, that exported Cambodian rice is often sent to Vietnam, where it is milled, before being exported'. 

Officials know little ...

The EU responds. The Phnom Penh Post reports (25 Dec.): 

'While the European Union Trade Commissioner Karel De Gucht never told the Ministry of Commerce that Cambodian rice was “30 per cent” mixed with the same product from Vietnam, he did say Cambodia had to better ensure that its harvest was homegrown and not from another country, a spokesman for the commissioner said yesterday'. 

The measured response would be as such:

'In response to the trade commissioner’s concerns, the Alliance of Rice Producers and Exporters of Cambodia (ARPEC) will form a Code of Conduct in a bid to protect the country’s rice exports.

ARPEC said in a statement released yesterday that all Cambodian rice exporters had taken note of the views and would sign the Code of Conduct with the Ministry of Commerce to self-regulate exports'. 

But when do you need to stop?

'ARPEC deputy secretary David Van said the issues raised in the Oryza article were informal and emanated from rumours within “EU circles”.

“As far as the rice exporters are concerned, we maintain that until clear evidence is produced by the EU, we do not condone their claims,” he said.

In response to suggestions that some Cambodian rice could be contaminated during transit to Vietnam-based milling facilities, Van said the external process does not mean the two rice origins are mixed. He added that the low supply of Cambodian milling facilities producing the country’s rapidly increasing harvest forces farmers to send their rice to Vietnam for milling.

“But all rice grown, harvested, milled and exported in Cambodia is 100 per cent our product,” Van said'. 

Collecting evidence need not be such a problem ... Ah but wait for it, a correction (Cambodian Daily, Dec. 26):

'In the story “Rice-Exports Alliance Rejects EU Accusations” (December 23), I was quoted as saying that “some of our rice millers take rice and hire Vietnamese millers to mill it and then bring it back to Cambodia for export.”

I would like to clarify that the rice exported to the European Union. is 100 percent made in Cambodia.

All aspects of the rice production are completed in Cambodia; moreover, the rice is also checked and issued a certificate of origin before being exported from Cambodia.

Kong Putheara, spokesman, Ministry of Commerce'. 

Oops.

Of prices & exports

The Bangkok Post (Dec. 4) quotes the UN's agricultural arm, the F.A.O.: 

'Thailand will see a 17% jump in its rice stockpiles to a record level next year as it pursues a policy of buying from farmers at above market rates, the Food and Agriculture Organisation (FAO) said on Wednesday'. 

So that spells more bad news for lower pricing in the future. It also notes: 

'The expansion of Thai stockpiles will help global milled reserves gain 2.6% to 179 million tonnes in 2013-2014, rising for a ninth year, said the FAO. World rough-rice production will expand 1.1% to a record 741.1 million tonnes, with Thai output rising 3.9% to 38 million tonnes.

"Greater competition resulting from an increase in Thai supplies in the world markets is expected to come to the detriment of a number of suppliers,'' said the FAO, citing India as the most at risk'.

The Thailand Development Research Institute (TDRI) had a recent forum on the future of global rice. So reports the Nation (Dec. 17).  The bad news: increasing incomes means an evening off of consumption with possible drops by 2050 while at the same time a shift to more quality rice. The good news: there isn't any! Recommended is for Thai farmers to increase efficiency.

The Bangkok Post (Dec. 17) quotes sources from Thailand's rice exporting association: 

'Rice buyers remain reluctant to purchase Thai rice even though prices are now competitive with Vietnamese grain. "This is unusual, as Thai rice prices are now quoted at about the same price as Vietnamese rice," said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association. "The free-on-board prices of 5% white rice, for instance, are only US$420 per tonne, but we still can't find buyers. This has never happened in Thai rice trading."'

Are buyers waiting for prices to drop more?

The year that was. For Thai exports: wilting ... (Bangkok Post, Dec. 27):

'The government acknowledged for the first time rice exports in 2013 will reach a mere 6.68 million tonnes worth US$4.38 billion, down by 3.9% and 7.9%, respectively'.

But are they correct?

'"If the government's rice stock sales made up 60% of the country's overall rice shipments, this is tantamount to the government selling as much as 3-4 million tonnes and the private exporters selling only only 2 million tonnes," said Mr Chookiat [honorary president of the Thai Rice Exporters Association ]. "This is impossible. Parboiled rice, which is sold only by exporters, is equal to 2 million tonnes this year. That would mean the exporters sold hardly any white rice".' 

It also notes that the anti-corruption committee will look into government-to-government trades.

Sector news

Mekong Oryza will export CEDAC's organic rice, so reports the Phnom Penh Post (Dec. 13).

What Cambodian exporters are up against? The Cambodian Daily (Dec. 24) goes into details of a truck carrying rice that has been impounded by police as it was above the maximum weight. Not so surprising, but the owner claims foul. Faulty scales. Will be continued.

More about winning the globe's best rice prize. The Phnom Penh Post has a nice article (Dec. 20) with the views of what may lie ahead. Challenges are funding, lower energy prices, poor logistics, high transportation costs and poor pr.

  

The Vientiane Times (Dec. 20) notes that Europe certifies rice from the province of Savannakhet: 

'Savannakhet has exported its first shipment of rice to European markets after attempting to enter one of the largest agricultural markets in the world for several years.

This year the province exported almost 2,000 tonnes of rice worth US$1.2 million in total, after European countries certified the standard of product as fit for sale in their markets, according to the Industry and Commerce Department'. 

FAO call for a pan-Asian rice strategy. Why? To avoid price crisis? It calls for increased efficiency. The nation (Dec. 1) has more background. Seems futile.
 

Vietnamnews (Dec. 25) mentions that Vietnamese rice is now regarded as the most expensive Asian rice. interestingly it notes that one of the reasons is that Thailand is selling older rice, thus Vietnamese rice is fresher and gets a better price. noteworthy is also that if price disparity continues Vietnam might buy Thai rice to market domestically freeing up domestic produce for export!

Unapproved

When is a GMO a GMO? We've seen this discussion before. China are hardly known for their anti-GMO stance. In fact they are one of the staunchest proponents. So it's a bit strange to see that they have rejected U.S. corn product imports because the imports were of GMO's whereby a strain had not been approved yet! Sourced from Reuters (Dec. 26):

'China has turned away about 2,000 tonnes of U.S. dried distillers grains (DDGs), a corn by-product, and more rejections are expected in coming weeks as Beijing imposes strict checks over an unapproved genetically-modified (GMO) strain, traders said on Thursday.
The move follows the rejection of more than half a million tonnes of U.S. corn after authorities detected the presence of MIR 162, a GMO variety developed by Syngenta AG and not approved for import by China's agriculture ministry'.

More on the background:

'Strict testing for MIR 162 comes as Beijing seeks to curb cheap corn imports and support domestic prices for the grain, industry sources have said.
The U.S. has urged China to act promptly to approve the strain'.

Seems that this is picking hairs.

Fight

The ongoing saga of the Thai rice pledging holds the global rice export market in it's grips, so much is clear. Everybody expects prices to drop, th question is when? 
In the meantime what will we learn from reading on? The rice pledging is stretching it's physical limits, Cambodia's exports are stalling but might take off (once more?), hybrid rice is over it's peak in Bangladesh.

But the most noteworthy news concerning rice may well be the scientists fight. In the left corner are all those that are  left rosy by the back braking efforts of rice farmers world wide and on the right are the scientists looking down on the practices of those farmers.

'Piqued over loosing out to an Indian farmer who beat his world record by harvesting 22.4 tonnes of rice per hector, a top Chinese scientist known as the "father of hybrid rice" has questioned the feat, terming it as "fake".

It is "120 per cent fake [a fake in reverse?]", Yuan Longping, who held the record earlier by growing 19.4 tonnes of rice in 2011, was quoted as saying by the Hong Kong-based South China Morning Post'.

Source the Financial Express (Feb. 21). 

In this Mr. Longping seems piqued by an article in the Guardian (Feb. 16): 

'Kumar, a shy young farmer in Nalanda district of India's poorest state Bihar, had – using only farmyard manure and without any herbicides – grown an astonishing 22.4 tonnes of rice on one hectare of land. This was a world record and with rice the staple food of more than half the world's population of seven billion, big news. It beat not just the 19.4 tonnes achieved by the "father of rice", the Chinese agricultural scientist Yuan Longping, but the World Bank-funded scientists at the International Rice Research Institute in the Philippines, and anything achieved by the biggest European and American seed and GM companies'.

As said the fight/discourse is more amusing than the actual discrepancy.

Thai tales

Wishful thinking is a government policy in Thailand. Proof: 

'Rice shipments from Thailand are poised to surge 15 per cent this year to help the country win back the top-exporter slot. Government sales are accelerating from its record stockpiles, an industry group said Wednesday'. 

However the sales will be obligatory, what with the storage scheme tying up both capital and storage space. It also notes that the baht is rising meaning even lower returns. From the Bangkok Post (Jan. 31).

Not everybody shares the optimism. Therefore they must regard an article in the Bangkok Post (Feb. 18) concerning doubts raised by rice traders as a let down: 

'The government expects to deliver 2.5 million tonnes of rice through government-to-government (G2G) contracts this year amid scepticism from the private sector that the goal is daunting, given the relatively high price of Thai rice and burgeoning supplies. "The target can be achieved but only in the case that the government sells its rice stock at loss," said Sompong Kitireanglarp, president of the rice exporter Ponglarp Co Ltd'.

Despite Thailand's assertion that they may well sell most of their stock, the Bangkok Post (Feb. 8) quotes the UN's Food and Agriculture Organisation (FAO) as fearing the lack of storage space: 

'The FAO said the country may be running out of room to store the staple.

Milled holdings may jump 40 per cent to 18.2 million (metric) tonnes in 2013, the Rome-based United Nations agency said in a report Friday on the global rice market. The reserves, which averaged 5.4 million tonnes a year between 2008-2010, have increased from 7.8 million tonnes in 2011, according to the report.

There may be a "looming shortage of storage space," the agency said. "Government stock-release plans have progressed slowly, further aggravating the supply situation for an export sector that is faced with little offshore demand," it said'. 

It also noted how the pledging scheme was helping neighbouring nations exports; but not in the intended way: 

'The rice-purchase scheme has elevated local prices, prompted increased production and "fostered a considerable rise in unofficial inflows" from neighboring countries, the FAO said in the report. An estimated 750,000 tonnes in unofficial shipments was moved in, up from 400,000 tonnes a year earlier, it said'.

This may explain why Cambodian exports are failing to rise (see below) ...

And a minor note: 

'The World Bank estimated the total cost may be as much as 440 billion baht ($14.8 billion) in 2012-2013, compared with 376 billion baht or about 3.4 per cent of gross domestic product the previous year'.

Other drawbacks rising, for instance the failure to maintain quality:

'A Democrat MP Thursday sliced open a bag of the government's pledged rice in parliament in a bid to demonstrate shoddy quality control of the stored paddy.
Warong Dejkitvikrom, the MP for Phitsanulok, said the rice, retrieved from Surin, was brown and rotten.
His display in the House drew protests from government lawmakers.
The government will not be able to maintain the quality of the pledged rice, Mr Warong said, questioning the Commerce Ministry's handling of the programme'. 

The (typical) government reply: 

'Mr Nattawut said the government is trying to maintain rice quality.

There are huge quantities of stored rice and it is impossible to ensure all the rice is in perfect condition, he said.

Mr Nattawut fired back at Mr Warong, asking how he gained access to the government's warehouse to take the sack of rice.

He accused Mr Warong of trespassing and said he would instruct the Internal Trade Department to lodge a police complaint against him'. 

! Bangkok Post (Feb. 8) includes nearly 50 comments ...

Then we have troubles in the cassave guarantee programme in Thailand (Bangkok Post, Feb. 20). Would this be a mirror of the rice pledging schedule.

'Police have pressed embezzlement charges against three firms accused of stealing cassava under the government's pledging scheme.

aeng Isan Agriculture Ltd's manager Kittipong Sanvarangkul, Chalobon Enterprise's manager Sakarin Ratana and Thong Fah Trading Ltd's manager Attaporn Pansa-ard were summoned Tuesday to Muang Buri Ram station.

Their companies were accused of stealing 34,000 tonnes of cassava, worth more than 250 million baht, under the government's produce pledging scheme between 2011 and 2012'.

Regional

A side note, Myanmar is yet again another country thriving off Thai woes: 

'The Commerce Ministry expects the volume of rice export will hit the highest in 60 years with metric tonnes of 1.5 million for this year'.

So reports elevenmyanmar (Feb. 14).

Another country wishing to cut into Thailand's export market is apparently Laos. The Vientiane Times (Feb. 13) reports: 

'The government is aiming to boost rice yields so the crop can be exported, but while harvests are improving, Lao farmers have been unable to reach the targets set in recent years.

...

Despite the shortfall, the government has continued to set ambitious goals by adding 200,000 tonnes to the target yield each year.

This means the target for this fiscal year is 3.8 million tonnes; in 2013-14 it is 4 million; and in 2014-15 it is 4.2 million tonnes.

Laos aims to become a rice exporter over the next decade if it can maintain current grain production and consumption growth rates, according to an Asian Development Bank funded study'.

Laos has it's own problems with meeting government goals (Bangkok Post, Jan. 25):

'Natural disasters and a shortage of seeds have caused rice production in Laos to miss government targets for the second consecutive year – dealing a blow to its hopes of becoming a rice-exporting nation'. 

So how far off the mark? 

'Laos produced 2.7 million tons of rice in 2012, 10,000 tons short of the official target set, according to official figures'.

!
 
Passé?

Hybrid rice is over the hill? The Financial Express (Feb. 19, Bangladesh version) reports that the acreage of hybrid rice in Bangladesh has dropped by nearly half since 2008. The lesson learnt (or not): 

'"The farmers are not interested to produce hybrid rice as its market value is much lower compared to traditional high yielding variety (HYV) and indigenous varieties. Consumers don't like its sticky test", he [key official at the Field Service Wing of DAE (Department of Agriculture Extension)] said'.

Cambodia

The Phnom Penh Post (4 Feb.)  has an article doubting whether Cambodia is profiting from the Thai pledging scheme and it's massive storing and thus leading to lower thai exports for higher prices which on the face it should benefit Official Cambodian exports. Note the word official. The porous border means higher prices and more profits for unofficial exports to Thai ware houses. It does note:

'According to Renne Outh, owner of Mega Green Imex Cambodia, Thai rice exporters have already been entering Cambodia to export rice from here'.

Phnom Penh Post (Feb. 8) features an article on the cooperative US company Akra Group (A boutique investment firm for international multiparty transactions) and a deal it signed with a rice mill. However it´s unclear what the deal entails and what, if any, effects will occur. 

Luckily there is an earlier article by Phnom Penh Post (Dec. 19): 

'Tightening the Cambodian command of the market, next year alone, Akra plans to increase milled rice exports by between 100,000 and 300,000 tonnes.

...

Farmers and millers are invited to buy shares in the company, which then guarantees to buy their rice at world market price, mill the rice, package it and sell into to markets such as the US under the universal branding of Akra rice.

The profits would then be fed back into the co-op, with the member-elected board determining whether this money goes directly back to shareholders or is used to further invest in infrastructure.

Akra will also sell inputs such as seed, fertiliser and heavy machinery at cost, or lend machinery to those who cannot afford it, and pay for inspectors from foreign markets to certify the product'.

Opening open doors. Phnom Penh Post (Feb. 20) gives the opportunity to open open doors:

'Cambodia could drastically enhance its rice yields by improving its irrigation infrastructure and convincing farmers to adopt modern agriculture practices, researchers said in a study'. 

Well, fancy that. Though the published article merits itself in scientific approach, the findings seem too obvious. And it references itself withSurvey of Rice Cropping Systems in Kampong Chhnang Province, Cambodia; Kleinhenz, V., Chea, S., Hun, N., 2013. Rice Science, 20(3). Possibly meant as an upcoming article as Issue 3 isn't expected for another 6 months ....

Manipulation is another aspect of Cambodia's rice cultivation requiring urgent attention, though the Phnom Penh Post (Feb. 19) questions the market principle, it seems: 

'Farmers have expressed concern over local brokers’ manipulation of the market during harvest season, reducing buying prices for farmers who have no access to actual market rates'. 

Prices always drop at harvest time and rise thereafter, seems simple logic not price manipulation.

Phnom Penh Post (Feb. 5) concludes there is much optimism in this new year for traders and millers:

'Rice millers and exporters are optimistic that they will see an increase in exports this year after they received higher orders toward the end of 2012, producers said yesterday.

Toch Tepech, president of the Svay Rieng Rice Millers Association, told the Post he had exported over 1,000 tonnes, mainly fragrant rice, to world markets last year. Most of the exports went to Europe.

“This year, I believe exports from my rice mill will increase 100 per cent because there was lower export last year,” he said. So far, he has already received numerous orders in 2013, he added'.  

This message is echoed two weeks later. The Phnom Penh Post (Feb. 22) reports a 165% surge for January. It unfortunate fails to mention why the surge. With the very low figures, could this be a one-off? 

Other products on the up are cashews. 

'Cambodia's cashew-nut exports increased sharply from 443 tonnes in 2011 to 4,453 tonnes last year, according to the Ministry of Commerce. But observers say these figures do not reflect reality, as a large percentage of exports had not been recorded'. 

Statistics (Phnom Penh Post, Feb. 6)?

Re-cap

Rice news during the past year has been dominated by Thai efforts to support it's farmers and rural areas by buying up all the nations rice at above market levels and storing it for future sales. Though initially rosy, the plan has backfired. Sales are near non-existent, world market prices have dropped rendering potential huge losses and the large amount of fraud has resulted in national political liability for the ruling party. 

And all of it could have been expected.

And has anything changed the last few weeks? well, there's certainly been a fair share or reporting.

Sales or not?

An MoU was signed between Thailand and China concerning the purchase of more than a quarter million tons (Nation, 22 Nov.). 

A day earlier the same source reported the possibility of 5 million tons moving northwards. But spread over 3 years. The bad news: 

'However, Thai rice exports to China dropped 57.8 per cent in the first 10 months of the year, to 91,460 tonnes'. 

Another day later, context comes in. The Nation:

'It has been remarked that this week's MoU is totally different from previous government statements that China would purchase 5 million tonnes of rice from Thailand in three years. There was no such fixed figure in the MoU but only a statement, without any firm commitment, that China would import high volumes of Thai rice and that Thailand would supply the rice as required by China. In addition, the price will be negotiated based on the market price at the time of any future transaction'. 

On the 24th the Bangkok Post has more insight on the potential losses:

'Mr Paibul also cited a warning from the Thailand Development Research Institute (TDRI) that the rice scheme could saddle the country with huge debts.

"The TDRI estimated losses from the rice scheme would be around 6,000-7,000 baht per tonne of paddy. This amounts to nearly 200 billion baht of losses per year or 800 billion baht during the four-year term of this government," he said.

As it is only a memorandum of understanding, either partner can cancel it at any time. In this case, Thailand needs China to import rice to help its dispose of its huge stockpile of about 6 million tonnes accumulated under its high-priced pledging scheme. Unfortunately, there is no G2G deal at all now'. 

And a few days later, apparently the Chinese ambassador to Thailand has said there is no deal at all (Bangkok Post, 2 Dec.): 

'The Democrat Party has demanded the government present documents to prove it has sealed a rice export deal with Beijing, after the Chinese ambassador to Thailand said the agreement had only been reached in principle'.

Pledge sidelines

Nigeria mentions receiving 10 year old Thai rice (Nation, 20 Nov.). With the Thai government hoarding it's own nations surpluses this could become more commonplace. Same publication, same day notes that already 100 cases are being researched by the Thai anti-graft agency.

The Thai Finance Minister though sees a positive future (Bangkok Post, 23 Nov.): 

'He [Fin. Min.] said the rice pledging scheme, which pays 15,000 baht per tonne for white rice paddy, might incur some losses, but the figure would not reach 300 billion baht'.

Hongkong reports that Thai rice is losing flavour in the local market: 

'"Hong Kong consumer behaviour has changed to lower-quality rice because of high prices of Thai rice and slowing economic growth. The Thai government should set a competitive price for rice, which should be lower than the current price by $100 a tonne in order to narrow the gap between Thai [rice] and its rivals," Chan [chairman of the Rice Merchants Association of Hong Kong and vice chairman of the Hong Kong Rice Suppliers Association] said'.  

Report from the Bangkok Post (19 Dec.).

The Nation (18 Nov.) notes: 

'The high price of Thai rice has resulted in the Kingdom losing about 50 per cent of its export customers as countries switch to importing more rice from India and Vietnam, which offer more attractive prices'.

And then the hard talk

Another commentary from the Bangkok Post (13 Dec.) applauds efforts to redistribute wealth between the wealthy Bangkok and the poorer rural areas, but questions the rice-pledging scheme as the main driver: 

'So far, the government has not taken any steps to deal with graft allegations. Actually, the Pheu Thai Party failed from the start in not being able to explain why the rice pledging price was set at 15,000 baht per tonne. It's unlikely that the sum is based on rational calculation.

Moreover, it failed to specify measures to handle the existing stock and the glut of incoming stock to prevent a decline in the quality of rice and also to recoup the sum it invested'.

Adding more content is this commentary by the Bangkok Post (5 Dec.) It first mentions the main points which have been repeated oft enough: the discrepancy between the government has bought the rice and the likely huge losses stemming from the sales. The other is the system which encourages fraud. Significant other non-intended consequences lie ahead such as farmers now intentionally seeking less favourable environs for their rice fields: if all fails they are confident they will receive government hand-out. More mono-cropping. The trading system is whithering away. And it finally notes the political undercurrent: the farmers are now the recipients and are relied upon to vote and empower their leaders ...

And over the horizon is more bad news for Thailand. FAO reports (19 Nov.) that production is growing faster than consumption: 

'Global rice production for 2012 is forecast to outpace consumption in 2012/13, resulting in an upward revision of 5 million tonnes in 2013 closing inventories, according to a new forecast by FAO's Rice Market Monitor (RMM) issued today'. 

More inventory ultimately means  lower prices in the long term.

 

Cambodia

In Cambodia much promise was made of the potential to export even larger amounts. Not happening.

The FAO have once again assessed Cambodia's productivity and expects it to drop (Phnom Penh Post (PPP), 22 Nov.). It's a bit unclear by how much.

Cambodia needs a loan of $200 million to make exports happen What's that? No show, well then we need um .. $50 million. So reports the PPP (27 Nov.): 

'Son Kuthor, president of the state-run Rural Development Bank (RDB), said last week that previous negotiations for a loan of $200 million stalled because of differences between the parties in how the loan should be used.
“We don’t hope for $200 million because of the conditions the bank imposed,” he said.
“We now hope to receive a pilot loan to buy paddy rice. We’ve so far suggest $20 to 50 million,” he added'. 

Cambodia's rice sector is reorganising itself by initiating a sole organisation which can deal with the Ministry of Economy and Finance (PPP, 17 Dec.). Name: Federation of Cambodian Rice Exporters (FCRE). 

'Cambodia’s Minister of Commerce Cham Prasidh, who presided over the launch ceremony, said the federation will gain the full support of the government and will work with it to deal with all issues over the export of milled rice.

“The FCRE is the only partner in the rice industry authorised to discuss issues with the government,” he said.

Cambodia has a number of milled rice associations, leading to inter-association disputes. However, Cham Prasidh said all of the organisations will maintain their authorisation to export milled rice.

He also warned that associations which do not become members of the FCRE will lose their right to talk to the government on export issues'.  

Bodes well?

The same source, a week earlier highlights one other organisation:

'The Alliance of Rice Producers and Exporters of Cambodia (ARPEC) will release US$2 million after December 15 to its members in nine provinces so they can buy paddy rice before the harvest season ends and stocks have been depleted.

Hann Khieng, director of ARPEC which was formed in May this year, said an internal meeting between the alliance’s management teams and members last week agreed to disburse about $2 million to its members'.

Back

Finally back on subject, hybrids. Hybrids are the panacea for our future, still so it seems, despite little proof forthcoming this year on whether or not anything tangible (more financial returns?) might arise. An interesting article from the South China Morning Post (28 Nov.) as even they are raising question marks as to whether the grail of achieving more is sustainable? 

'A farming pioneer's ambitious goal to increase the yield of hybrid rice by 11 per cent in the next three years risks making the staple more vulnerable to weather, disease and pests, agriculture experts have warned. 

...

China's rice fields, including both hybrid and normal rice, already yield 6.7 tonnes a hectare annually. That was not far behind the 7.5-tonne yields in developed countries where the most advanced farming technologies are used, such as Australia and the United States.

Several scientists, however, said the 15-tonne target was impractical because the costs of growing such rice, in terms of fertiliser and land management, would be enormous. Moreover, they warned that focus on field yield could sacrifice the crop's resistance to weather and pests'. 

A good read.