Rice: Price competition with India

India removal of limit on how much rice can be exported causes problems with Thai govt policy not to compete on price with other countries.

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AGRIBUSINESS

Indian rice exports taking toll

Phusadee Arunmas

Thai rice exporters are starting to suffer from an inability to export to the global market and some may cease operating if sales don't improve in the next six months, say industry executives.

The Thai industry is facing a severe challenge from India, which has lifted its ban on exports of non-basmati rice and also removed all limits on how much of the grain can be exported, said Korbsook Iamsuri, president of the Thai Rice Exporters Association.

Thai exporters are struggling because the government has a policy not to compete on price with other countries.

"The real world for commodities is price competition so Thai exporters will need to wait until the situation changes, such as India stops exporting its rice," she said.

As the Thai government is operating a paddy mortgage scheme, paying farmers high prices of 15,000 baht a tonne for 100% white paddy and 20,000 baht for fragrant paddy, Thai exporters complain that they cannot sell rice.

India aims to export 4 million tonnes of non-basmati rice by March, the end of the country's fiscal year, and its government is likely to allow the export of 2 million tonnes more.

Figures for January showed Thai exporters were in trouble as the country shipped only 378,000 tonnes abroad. If the government-to-government rice delivery to Indonesia was excluded, Thai exporters sold only 200,000 tonnes in the month, around 25% of average monthly exports last year.

Ms Korbsook said that if the situation remained unchanged with Indian sales continuing and no natural disasters, Thailand may export only 6.5 million tonnes of rice and the price is unlikely to reach the average of US$700 a tonne as targeted by Commerce Ministry.

However, the country may be able to export rice if conditions change, such as the Indian rupee appreciating and narrowing the price difference with Thai rice to only $40-50 a tonne.

Chanchai Rakthananon, president of the Thai Rice Millers Association, said India normally exported 3-4 million tonnes of rice a year and the exports from India would cover flood damage to Thai production late last year.

Because the floods damaged thousands of rai of fields, only 6 million tonnes of paddy have entered the mortgage scheme, much lower than the target, so he is confident that Thailand would be able to export at least 8 million tonnes of rice this year.

He said Thailand should not be worried and should let India sell its rice because Thailand has a share of 30% in the global rice trade of around 32 million tonnes this year.

"If Thailand stops exporting rice, it could cause a global food security problem, especially with Europe encountering unusual cold which may greatly damage grain output," said Mr Chanchai.

Europe is not a major market, importing only about 500,000 tonnes a year.

Jiranun Wongmongkol, director of commercial affairs at the Thai Embassy in Cambodia, said several Thai investors were now investing in the rice industry in Cambodia as the largest miller in that country has the capacity to produce only 500 tonnes a day.

Asia Golden Rice has invested $46 million to develop an integrated rice mill and rice improvement factory with a capacity of 2,000 tonnes a day. Once the project is operating at full capacity in two years, Cambodia may export as much as 1 million tonne of rice a year.

(Source: Bangkok Post, AGRIBUSINESS, Indian rice exports taking toll, 13/02/2012, Phusadee Arunmas, link) 

Global Rice Markets Vocabulary

agribusiness - all the businesses "involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales" (See Wikipedia)

toll - the number of deaths and injuries caused by a disaster, accident, disease, etc.
takes toll - causes damage

Indian rice exports taking toll

global - throughout the world ทั่วโลก
global market - the market for a good all over the world

suffer - to experience physical or mental pain
suffer from an inability to export to the global market

cease - to stop จบ, ยุติ
cease operating - stop operating; stop working

improve - to get better ดีขึ้น

may cease operating if sales don't improve in the next six months

executives - a high level manager in a company (making plans and ensuring they executed successfully) ผู้บริหาร
industry executives - high level managers of companies in an industry

Thai rice exporters are starting to suffer from an inability to export to the global market and some may cease operating if sales don't improve in the next six months, say industry executives.

severe - very serious and worrying ที่รุนแรง ที่น่าเป็นห่วง
challenge - something that needs a lot of skill, energy, and determination to deal with or achieve สิ่งที่ท้าทาย, การท้าทาย

facing a severe challenge - must do something very difficult to do (difficult goal to achieve)

ban - to say officially that people must not do, sell or use something การประกาศห้าม officially not allowed to do something ห้ามอย่างเป็นทางการ an official statement ordering people not to do, sell or use something การห้าม
lift ban - end ban (people can now do the activity, activity now allowed)

basmati rice - "a variety of long grain rice grown in India, Bangladesh and Pakistan, notable for its fragrance and delicate, nuanced flavour... India is the largest cultivator, consumer and exporter of this rice; it is primarily grown through paddy field farming in the Punjab region... Cooked grains of Basmati rice are characteristically free flowing rather than sticky, as with most long-grain rice.. available in two varieties: white and brown" (See Wikipedia)
non-basmati rice - all other rice, including the rice produced in Thailand

lifted its ban on exports of non-basmati rice

grain - 1. a crop like rice or wheat; 2. the seed from cereal crops such as rice, wheat, or corn เมล็ดพืช
removed all limits on how much of the grain can be exported

The Thai industry is facing a severe challenge from India, which has lifted its ban on exports of non-basmati rice and also removed all limits on how much of the grain can be exported.

struggling - having serious difficulties มีความยุ่งยาก
policy - a set of plans or action agreed on by a government, political party, business, or other group; a plan of action to guide decisions and achieve outcomes นโยบาย (See Wikipedia)

Thai exporters are struggling because the government has a policy not to compete on price with other countries.

commodities - goods with every unit the same (every kilo of rice is the same, for example), usually bought in large quantities สินค้าที่ซื้อเป็นจำนวนมากๆ

price competition - law of supply and demand; when companies in a market compete to sell their rice to buyers by offering lower prices (buyers want lowest price)

supply and demand - the main model in economics of how prices are determined in markets: "in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in an economic equilibrium of price and quantity" (See Wikipedia)

The real world for commodities is price competition so Thai exporters will need to wait until the situation changes, such as India stops exporting its rice.

paddy - rice after it has been harvested from the field  ข้าวเปลือก
mortgage - a legal agreement in which you borrow money from a bank in order to buy a house, build something, develop a piece of land, etc.การจำนอง
scheme - a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ

paddy mortgage scheme - the government system of supporting rice prices in Thailand
fragrant paddy - the paddy of Jasmine Rice (Hom Mali) (See Wikipedia) ข้าวหอมมะลิ

As the Thai government is operating a paddy mortgage scheme, paying farmers high prices of 15,000 baht a tonne for 100% white paddy and 20,000 baht for fragrant paddy, Thai exporters complain that they cannot sell rice.

fiscal - related to government spending; connected with the government budget, i.e., public money เกี่ยวกับงบประมาณ
March, the end of the country's fiscal year

India aims to export 4 million tonnes of non-basmati rice by March, the end of the country's fiscal year, and its government is likely to allow the export of 2 million tonnes more.

excluded - not included

Figures for January showed Thai exporters were in trouble as the country shipped only 378,000 tonnes abroad. If the government-to-government rice delivery to Indonesia was excluded, Thai exporters sold only 200,000 tonnes in the month, around 25% of average monthly exports last year.

natural - found in nature (not made in a factory by humans) ตามธรรมชาติ
natural disasters -

targeted - when something is made into a goal; aiming to achieve this goal ตกเป็นเป้า; intended to attack someone or something ตั้งเป้า เล็ง มุ่ง
target - a goal; the amount you are planning to achieve เป้าหมาย

if the situation remained unchanged with Indian sales continuing and no natural disasters, Thailand may export only 6.5 million tonnes of rice and the price is unlikely to reach the average of US$700 a tonne as targeted by Commerce Ministry.

currency - the money used in a country (examples: Thai baht, Burmese kyat, Korean Won, Indian rupee, etc)
currency appreciation - when the value of a country's currency increases compared to other countries (making country's exports more expensive than other countries)
Indian rupee appreciating - the value of India's currency becomes more valuable compared to other currencies

narrowing - decreasing in size
narrowing the price difference - when different between two prices decreases; two prices move towards each other (moving towards one price)

However, the country may be able to export rice if conditions change, such as the Indian rupee appreciating and narrowing the price difference with Thai rice to only $40-50 a tonne.

X covers Y - X is enough to make up for decrease Y (without X there would be a decrease Y, but with X no decrease) 
exports from India would cover flood damage to Thai production late last year.

India normally exported 3-4 million tonnes of rice a year and the exports from India would cover flood damage to Thai production late last year.

confident - being certain of your abilities or of having trust in people, plans, or the future มั่นใจ

Because the floods damaged thousands of rai of fields, only 6 million tonnes of paddy have entered the mortgage scheme, much lower than the target, so he is confident that Thailand would be able to export at least 8 million tonnes of rice this year.

trade - the buying and selling of goods การค้าขาย
global rice trade - the buying and selling of rice all over the world

share - to have or use something at the same time as someone else ใช้ร่วมกัน
share (noun) - the part of some whole that one person or company has (example: each child got an equal share of the birthday cake at the birthday party)
market share - the percentage of total sales or customers in a market that one company has (See Wikipedia)

Thailand has a share of 30% in the global rice trade

He said Thailand should not be worried and should let India sell its rice because Thailand has a share of 30% in the global rice trade of around 32 million tonnes this year.

security - the activity of making safe or protecting from harm
food security - protecting a country from situation when there is not enough feed the people in the country (See Wikipedia)
global food security problem

with Europe encountering unusual cold which may greatly damage grain output

If Thailand stops exporting rice, it could cause a global food security problem, especially with Europe encountering unusual cold which may greatly damage grain output. Europe is not a major market, importing only about 500,000 tonnes a year.

commercial - for business purposes
affairs - events and activities relating to the government, politics, economy etc of a country, region, or the world ความสัมพันธ์ระหว่างประเทศ
commercial affairs - business activities

Jiranun Wongmongkol, director of commercial affairs at the Thai Embassy in Cambodia

capacity to produce - the amount of something that can be produced ความสามารถในการ (ผลิต)

several Thai investors were now investing in the rice industry in Cambodia as the largest miller in that country has the capacity to produce only 500 tonnes a day

integrated - combined things so that they work well together (as one unit , one whole, one effective system)  ที่รวมเข้าด้วยกัน
improvement - when something gets better or when you make it better การปรับปรุง, การทำให้ดีขึ้น

integrated rice mill and rice improvement factory

operating at full capacity - factory cannot produce any more (because it is using all the machinery and equipment already)

Asia Golden Rice has invested $46 million to develop an integrated rice mill and rice improvement factory with a capacity of 2,000 tonnes a day. Once the project is operating at full capacity in two years, Cambodia may export as much as 1 million tonne of rice a year.