World rice prices to move in $10-$20 range until Q1 2013

NUSA DUA, Indonesia: Global rice prices are likely to rise or fall by $10-$20 a ton from now until the first quarter of 2013, as plentiful supply and an intervention scheme by top exporter Thailand keep prices largely steady, a senior rice economist said.
Samarendu Mohanty, senior economist at the Manila-based International Rice Research Institute (IRRI) said he expected steady demand to help absorb supplies, which were expected to start to rise in October when India and Thailand are due to begin harvesting their crop.
“Global rice stocks stood around 100 million tons and there is no factor to cause any supply shock as crops in India, Thailand and Vietnam are good,” Mohanty said. “Another factor that helps to prevent prices from falling sharply is the Thai government intervention.”
“Prices could move in a tight band of $10-$20 per ton up or down in the next few months. I don’t expected any big change in prices,” he added.
Prices for common grade 5 percent broken rice stood at $390-$430 per ton, offered by India and Vietnam, while Thai grade rose to $585 per ton because of the government buying scheme, which is aimed at helping farmers.
Thailand, the world’s biggest rice exporter, will renew its intervention policy in October after the current scheme expires, aiming to buy up to 25 million tons of paddy at 15,000 baht ($480) a ton, a senior government official said this month.
Mohanty said the fate of Thailand’s plentiful rice stocks would have an impact on prices. Any release of government stocks exceeding one million tons would drive prices lower, he added.
The Thai government had record high stocks of 12 million tons, bought from farmers since the scheme start in October 2011, which it so far has had little success in exporting due to its high price.
The government said it had sold up to 7.3 million tons to Indonesia, The Philippines and China, but buyers denied the deals.
It also tried to sell via open tender around 200,000-500,000 tons to exporters and local rice retailers, but most of that amount was sold to domestic retailers.