BL: Rice Slumps by Limit as Cambodia Lifts Ban on Overseas Sales
By Jae Hur and Luzi Ann Javier
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May 27 (Bloomberg) -- Rice futures tumbled by their daily limit for a second straight session as producers lifted or eased export bans, alleviating concerns that global supplies may not meet demand.
Cambodia will lift a ban on exports as the country has enough supplies to meet domestic demand, the Financial Times reported today, citing Prime Minister Hun Sen. Vietnam and India said earlier this month they may ease export curbs.
The staple for half the world, which reached a record $25.07 on the Chicago Board of Trade on April 24, fell as much 50 cents. The record prices, including palm oil and wheat, have stoked concern about shortages and caused riots from Haiti to Egypt.
``The Cambodian news has dampened market sentiment,'' Takaki Shigemoto, an analyst with Tokyo-based commodity broker Okachi & Co., said by phone today. ``With major producers in Southeast Asia braced for harvesting bumper crops in the next couple of months, the global market see more supplies.''
Rough rice for July delivery fell as much as 2.5 percent to $19.85 per 100 pounds, and traded at that level at 11:18 a.m. Singapore time. The price is still 88 percent higher than a year ago. The Chicago market, which fell 50 cents on May 23, was closed yesterday for a public holiday.
Cambodia has more than 1 million tons of rice available for sale overseas, the Financial Times said, citing the Cambodian premier. The ban on shipments of the crop overseas was put in place in March, the report said.
Global Forecast
Global output of milled rice in 2008 will be 445.3 million tons, up 2.3 percent from last year's record 435.2 million tons, the Food and Agriculture Organization of the United Nations said on May 22. Consumption will rise 2.4 percent, the agency said.
The Philippines, the world's largest rice importer, has failed this year, to fill state tenders for the grain, driving prices higher last month. The country imports about 2 million tons a year to plug a supply deficit.
A Philippine food company was the sole buyer today at a rice tender for private companies in Manila, the National Food Authority said. Uni-Agro Native Products Inc. was seeking 500 tons out of the total 141,440 tons of tariff-free imports on offer, Assistant Administrator Conrad Ibanez told reporters.
The Philippines may hold another government rice tender in December to make sure stockpiles in state-owned warehouses will not drop below the equivalent of 15 days' of consumption, Ibanez said. The Philippines consumes about 33,000 tons of rice a day.
`Soften Prices'
Cambodia's lifting of the nation's export ban ``will soften prices,'' Ibanez said. ``We'll import if September harvests are lower than last year.''
Vietnam, the world's second-largest rice exporter, said on May 21 that a ban on new overseas shipments may be lifted from July and the harvest in the north of the country is ``much better'' than previously expected.
Pakistan, the fifth-biggest exporter, will permit shipments of 1 million tons because local needs have been met, Mohammad Azhar Akhtar, chairman of the Rice Exporters Association of Pakistan, said on May 16.
Japan is in talks with the Philippines, the world's largest rice importer, about shipments from Japan's stockpiles of overseas rice, according to a government official, who declined to be identified in remarks reported May 12.
India, the world's second-biggest rice producer after China, may partly ease a ban on rice exports as the country is set to harvest a bumper crop, Commerce Secretary G.K. Pillai told reporters on May 9. Output in the year ending June may reach a record 95.68 million tons, the farm ministry said April 22. That compares with 93.35 million tons produced a year earlier.
To contact the reporters for this story: Jae Hur in Singapore at jhur1@bloomberg.net; Luzi Ann Javier in Manila ljavier@bloomberg.net
Last Updated: May 27, 2008 00:55 EDT
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