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Rice falls as Thailand,
Brazil not to limit sales
Monitoring Report
RICE prices tumbled in Chicago after reaching a record yesterday, as
Thailand and Brazil said they won’t curb exports and Pakistan
announced plans to sell the cereal, easing concern about a global
supply shortage. Thailand, the world’s biggest exporter of rice, has
no plans to limit rice exports, Finance Minister Surapong
Suebwonglee said today. Brazil’s Agriculture Minister Reinhold
Stephanes said yesterday the country wouldn’t curb exports. Pakistan
plans to export 2.5 million metric tons this year, farm minister
Chaudhry Nisar Ali said yesterday. Rice, the food staple for half
the world, has more than doubled in a year as China, Vietnam and
Egypt curbed sales to safeguard domestic reserves.
The gains have spurred social unrest in countries including Haiti
and Egypt and prompted Wal-Mart Stores Inc.’s Sam’s Club to limit
rice purchases to four bags a visit in all U.S. stores.
“Concerns that Thailand will limit rice exports are easing now,”
Kazuhiko Saito, a strategist at Interes Capital Management Co. in
Tokyo, said by phone today. Rough rice for July delivery fell as
much as the daily maximum of 75 cents, or 3.1 percent, to $23.57 per
100 pounds in after-hours electronic trading on the Chicago Board of
Trade and stood at $23.665 at midday in London. The contract fell
1.7 percent this week, the first decline in five weeks. The most
active contract reached a record $25.07 yesterday. The dollar rose
1.3 percent yesterday against the euro on increasing speculation the
Federal Reserve will stop cutting interest rates. Rice’s 14-day
relative strength index, a gauge of momentum, had held above 70
since April 14, signaling prices may decline.
Japan, which is self-sufficient in rice, will delay seeking imports
of the grain required under a World Trade Organization agreement
until international prices stabilize, a government official said
yesterday. The country imported 630,550 tons of rice in the year
ended March 31, part of a WTO agreement to seek 770,000 tons.
“Japan’s move will encourage South Korea to follow suit and this
will definitely help ease supply tightness in the market,” Saito
said. The two countries import about a combined 1 million tons a
year, he said.
In other grain markets, wheat for July delivery declined 7.75 cents,
or 0.9 percent, to $8.1625 a bushel as of midday in London. Wheat
declined 7.8 percent this week, compared with a 1.5 percent drop in
the UBS Bloomberg CMCI Index of 26 raw materials. Global wheat
production will rise 6.8 percent in the 2008-09 season as record
prices spur farmers to sow more, the International Grains Council
said yesterday. Wheat output is expected to climb to 645 million
tons from 604 million tons this season, according to the
London-based council. Inventories are forecast to gain 12 percent to
128 million tons, led by an increase in the U.S., the IGC said.
Milling wheat for May delivery on the Euronext.liffe exchange in
Paris climbed 3.75 euros, or 1.9 percent, to 201 euros ($314) a ton
as of 12:46 p.m. local time. Prices have climbed 23 percent in a
year. Soybeans for July delivery were down 16 cents, or 1.2 percent,
at $13.45 a bushel, while corn for July delivery fell 6.25 cents, or
1.1 percent, to $5.8325 a bushel. Soybeans reached a record $15.8625
on March 3 and corn touched $6.23 on April 17.
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