BIDDING TO OPEN FOR WHITE RICE

       The Commerce Ministry would soon open bidding for white rice to relieve rising pressure on rice prices and free up warehouse space for the upcoming harvest.
       "The ministry will soon call for a meeting with agencies, including the Foreign Trade Department and the Public Warehouse Organisation, to fix the volume and time for the new tender," Commerce Minister Porntiva Nakasai said yesterday.
       The government's National Rice Policy Committee recently agreed that it was time to release rice stocks to the market, she said.
       The government has about 6 million tonnes of the grain in its inventory, which it tried twice to sell to the market, but the bids were too low.
       Paddy rice will not be made available, even though exporters have been clamouring for a supply of unhusked rice, as the procedures for releasing paddy rice is more complicated than for polished rice, she added.
       Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said the government must consider disposing of its huge rice stocks, to address the shortage in the domestic and export markets.
       "Releasing stocks to rice exporters and domestic packers via bidding would be an efficient way of easing rising prices, particularly domestic prices," he said. The rice should be released in small lots to prevent the rice price from dropping, he said.
       Consumers have been forced to shoulder higher retail rice prices because domestic traders and exporters have had to compete to purchase rice from the market.
       In the past week, the domestic price for 5-per-cent white rice jumped from Bt1,500 to Bt1,600 per 100-kilogram sack.
       Yangyong Phuangrach, director-general of the Internal Trade Department, said his department will soon call an urgent meeting with millers, exporters and agencies to prepare for the kick-off of the rice guarantee project next month.
       The department will also discuss issues relating to rice liberalisation under the Asean Free Trade Area.

       "Consumers have been forced to shoulder higher retail rice prices because domestic traders and exporters have had to compete to purchase rice"

Newin among 44 cleared in graft case

       The Supreme Court has acquitted political playmaker Newin Chidchob and 43 others of corruption and malfeasance charges in a 1.44-billion baht rubber sapling procurement deal.
       The court also cleared the 44 defendants of the 1.3 billion baht compensation for alleged damage to the state from the projects claimed by the plaintiff, the National Anti-Corruption Commission (NACC) on behalf of the 2006 coup-appointed Assets Scrutiny Committee (ASC).
       The case, investigated by the ASC,mainly centred on unlawful approvals for the use of state funds and collusion among bidders.
       The project was initiated in 2003 by Mr Newin, then deputy agriculture and cooperatives minister under the Thaksin Shinawatra government, and Chakan Saengraksawong, then director-general of Department of Agriculture (DOA).
       The court's Criminal Division for Holders of Political Positions cleared Mr Newin with 8:1 votes and Mr Chakan with 7:2 votes of wrongdoing for proposing a new line of financial sourcing by allocating funds from the Farmers Aid Fund to purchase 90 million rubber saplings for farmers in 36 northeastern and northern provinces.
       "They only followed the then government's policy to improve infrastructure in the agriculture sector," one of the nine judges said.
       Mr Newin appeared relieved after the two and a half hour reading of the verdicts, rushing to hug other former ministers.
       The Buri Ram politician told reporters that he believed the disputed project would eventually bring about profits to farmers engaging in it over the next two years.
       "I have only one thing left to do that is to do every thing to protect the monarchy," said a tearful Mr Newin.
       Key Bhumjaithai politicians including Interior Minister Chavarat Charnvirakul and Deputy Interior Minister Boonjong Wongtrairat attended the hearing.
       Banned politician Sora-at Klinprathum, under the Bhumjaithai wing,is among other four former ministers and state officials cleared of wrongdoing. In their capacity as panel members of the Farmers Aid Fund, they approved the fund's budget allocation.
       The ASC charged that rubber plants did not qualify for the Farmers Aid Fund's funding, but the court found otherwise.
       Other former cabinet members cleared of all charges include former deputy prime minister Somkid Jatusripitak, former deputy finance minister Varathep Ratanakorn, and former commerce minister Adisai Bodharamik.
       Mr Adisai, who did not show up during the first scheduled hearing on Aug 17 and forced the court to postpone it, failed to attend the session. He earlier told the court he was receiving medical treatment in the United States.
       After the ruling, the court also revoked an arrest warrant earlier issued to Mr Adisai for his absence.
       The court also acquitted state officials and three sapling supplier companies of criminal charges involving collusion in the bidding.
       Using criminal offences, the ASC accused the 44 defendants of malfeasance and causing damage to the state in connection with the project.
       The Office of the Attorney-General did not accept the panel's case submitted by the ASC, saying it was "incomplete". But the ASC insisted on going ahead with it.
       ASC member Kaewsun Atibhodhi said he accepted the ruling of the Supreme Court and believed in the politics-free trial and all the nine senior judges handling the case.
       Mr Kaewsun said the ASC had not tried to unfairly treat any defendants in the case but had taken action in line with the evidence.
       "I don't think there will be a counter lawsuit from any acquitted defendant.The court acquitted them because of different legal viewpoints," he said.
       Prompong Nopparit, spokesman for the Puea Thai Party, said the court's ruling judged the ASC's credibility.

       THE VERDICT
       DEFENDANTS: Former deputy agriculture and cooperativers minister Newin Chidchob and former department of agriculture chief Chakan Saengraksawong.
       CHARGES: Violations of laws and regulations for initiating the sapling project and for proposing that financing be allocated from the Farmers Aid Fund (FAF) and repayments be made by the Rubber Replanting Aid Fund (RRAF).
       VERDICT: Not guilty. The defendants acted in line with government policy.
       ..............................................................................................
       DEFENDANTS: 17 members of the FAF comprising state officials and four ministers-former deputy prime minister Somkid Jatusripitak, former agriculture and cooperatives minister Sora-at Klinprathum, former commerce minister Adisai Bodharamik and former deputy finance minister Varathep Rattanakorn
       CHARGES: Unlawful approval of the use of the FAF's budget for investment and the RRAF's revenue for repayment ot the former.
       VERDICT: Not guilty. The decisions werre lawful.
       ..............................................................................................
       DEFENDANTS: Eight state officials overseeing the bidding process.
       CHARGES: Wrongfully setting up bidding conditions to help certain bidders, and negligence investigating collusion and shared interests among bidders.
       VERDICT: Not guilty. No evidence suggested their wrongdoing. The defendants checked bidders' documents correctly as required.
       ..............................................................................................
       DEFENDANTS: Bid winner Charoen Pokphand Seeds (CPS) and two other bidders
       CHARGES: Bidding collusion by submitting false documents on their credentials and acquisition of sufficient rubber planting areas to help CPS win the deal. The three companies shared business interest and lines of management.
       VERDICT: Not guilty. The credentials documents contained no false statements.

CP TO PURSUE PLAN AFTER COURT VERDICT

       The Charoen Pokphand Group will shortly proceed with its integrated rubber business plans following the Supreme Court's acquittal yesterday of 44 defendants accused of wrongdoing in the controversial sapling scheme.
       Criminal charges against former deputy agriculture minister Newin Chidchob and four other ex-ministers, as well as bureaucrats and businessmen, including those of the CP Group, were all dropped.
       The court's verdict, which took two and a half hours to read out, said no laws had been violated, because the scheme, costing Bt1.44 billion during the tenure of ousted prime minister Thaksin Shinawatra, was intended to develop rubber plantations in the Kingdom.
       The scheme, in which 90 million rubber saplings would be handed out to farmers, had been initiated by Newin, now a powerful figure behind prime Minister Abhisit Vejjajiva's coalition government, as well as other ex-ministers, including former deputy premier Somkid Jatusripitak and former commerce minister Adisai Bodharamik.
       If found guilty, Newin and others could have faced imprisonment, because they stood accused of violating the Criminal Code, state procurement guidelines and other laws.
       Following the Supreme Court's verdict, Montri Congtrakultien, president of the CP Group's Crop Integration Business Group, said the firm would proceed with its three-point plan for achieving integration of its rubber-business development programme.
       Given that the 90-million-sapling scheme was suspended, he said the group would take responsibility for delivering the remaining 16 million saplings to growers.
       Its business policy is to promote the use of hybrid JVP 80 rubber saplings under the Agriculture Department's promotion project.
       Second, the group early next year will introduce rubber-tree harvesting machines that will allow farmers to tap rubber trees in all weather, including rain.
       In addition, the group is also in talks with potential partners from Japan and China to join forces in developing value-added rubber products. They include Unimax International, a Chinese manufacturer and exporter of various kinds of sealing and thermal insulating products.
       Federation of Thai Industries chairman Santi Vilassakdanont said all parties should accept the Supreme Court's verdict.
       "I believe most people are happy with the court's verdict. Since all 44 defendants - who are politicians and state officials - have been found not guilty, things should be able to move on smoothly," he said.
       Spa-Hakuhodo chairman Kitti Chambundabongse called the rubber-sapling verdict "fair".
       "Our judiciary system and its verdicts must be respected," he said, adding that the sapling scheme was good for people and their livelihoods.
       "The rubber-sapling project needs to be implemented flexibly, due to its nature as an agricultural project."

An inconvenient truth from the plains of Isan

       Some people don't believe global warming is real and many are not so sure it is happening now. To these people Vichein Kerdsuk, a researcher at the Research and Development Institute (RDI) of Khon Kaen University, would like to say that climate change is definitely already taking a toll on the Thung Kula Ronghai (the plain of crying nomads), the heartland of the world famous Thai hom mali jasmine rice.
       CHANGING TIMES: An old farmer surveys his rice farm in the northeast. Climate experts have warned of drastic declines in crop yields due to climate change.
       A paper presented to the RDI symposium 2009 by academics and his team provides evidence that the northeastern plain is already experiencing the impacts of global warming, including a higher mean temperature, change in the rain pattern and more frequent natural disasters.
       Farmers in the plain, which is the largest area of jasmine rice cultivation in the country, have suffered on average a 45% reduction in production of hom mali rice in recent years, according to the research.
       The study also showed extreme weather swings - drought and floods are an increasing threat to farmers in the plain.
       "Climate change is shaking up the 'Kitchen of the World'," Mr Vichein said, referring to the slogan coined by Dhanin Chearavanont, chairman of the Charoen Pokphand Group, and taken up by the Thaksin Shinawatra government to promote Thailand's position as a major global agricultural player.
       Thai jasmine rice has long been popular around the world because of its taste and its good price, but the market has become highly competitive, with many countries now producing the rice variety. The "Kitchen of the World" campaign has sought to differentiate Thai hom mali grains from the competition and add value to the product.
       While the campaign has not been a priority of the present government, there is no question of hom mali's continuing importance to the country's export portfolio. According to the Thai Rice Exporters Association, in the first five months of 2009 Thailand shipped 1.17 million tonnes of Thai hom mali rice, worth 28.5 billion baht.
       PRIDE OF THAILAND: A farmer with hom mali shoots in his hand.
       Thung Kula Ronghai covers 2.1 million rai (3,360 square kilometres), an area five times the size of Singapore, spread throughout the five northeastern provinces of Roi Et, Maha Sarakham, Surin, Si Sa Ket and Yasothon.
       Northeastern farmers have an intimate relationship with the cycles of nature and have always had to deal with climate variations, but the changes in recent years - hotter weather and more frequent natural disasters - have been harder to adapt to.
       Buasi Srikhampha, 51, who has two rai of paddy field in Rasi Salai district of Si Sa Ket province, said her once-idyllic existence had turned into a kind of bad dream. "Everything has changed so quickly and life has become very hard," she said. "My crops are losing out to both drought and flood.
       "We are used to annual drought and know how to coexist with it, but we are not used to extreme weather coming on so swiftly and lasting so long," said the farmer.
       To get out from under the burden of the family's accumulated debts, her husband and her two teenage daughters have migrated to Bangkok to work, leaving her alone to take care of the farm.
       GREEN FEAST: Buasi Srikhampha gathers grass to feed her two cows.
       In this uncertain climate some farmers are reluctant to even sow their crops. Mrs Buasi said several of her neighbours who had been hurt by the unusually severe floods of last year are leaving their fields fallow for now, adopting a wait and see attitude.
       "The weather fluctuations are scaring them," said Mrs Buasi.
       SEASONS OFF KEEL
       The air in the plain feels somehow more tense than before, as if nature can no longer be trusted. Dong Noonto, standing under a tree as he looked over his field, lamented that the seasons have gone haywire.
       "When I was a boy, the rains would come and last a certain period of time," said the farmer, who has a nine-rai farm in Si Sa Ket province. "Now it is unpredictable."
       The 59-year-old, who had never heard of global warming, said that many are turning to the supernatural for an explanation. A strong belief in mysterious supernatural powers is still found in the villages of the plains, a mixture of Phi (ancestral ghosts), Buddha and Brahman, as well as many local gods who reside in the ancient plain. Many blame unexplained occurrences such as severe droughts, fierce thunderstorms and unrelenting rains as the work of supernatural powers.
       FARMER’S CONCERN: Dong Noonto watches over his young hom mali rice plants, above. He is worried his fields might be swallowed by flash floods.
       But some devout Buddhists like Mr Dong see it otherwise.
       "Some people who have lived in the plain for a long time believe this calamity is the work of Chao Phor [an ancestral ghost], because he is angry," said Mr Dong. He believes, however, that he and the other farmers in the plain are victims of their own karma.
       "When you talk about global warming to farmers there aren't many who really understand what you are talking about," said Mr Vichein. Authorities should educate local communities about climate change and its impacts, he said, adding that such information is of vital importance to farmers in certain parts of the country which are prone to extreme weather conditions.
       Mr Vichien hastened to add that he was not saying that the farmers are ignorant. During his study he witnessed many locals adjusting their farming schedules and methods in light of the changing conditions.
       In some instances farmers have actually benefitted from the change. For example, some whose fields are on higher ground have taken advantage of increasing volumes of rainfall to initiate a second yearly crop, as is done by farmers in the Central Plain.
       GROWING SEASON: Verdant rice fields under cultivation.
       But Mr Vichein said that overall global warming is driving wild climate swings that are punishing the northeastern provinces with increasing frequency.
       One clear consequence is the shifting of seasonal patterns. He said harvesting was typically being done much earlier - from late November to early October - due to a change in the rain pattern. In order to come up with suitable and timely measures to deal with and mitigate the effects of climate change, Mr Vichein is embarking on a wider and more in-depth research project to determine the impact of global warming in the Chi and Moon river basins. The research will cover up to 19 provinces in the Northeast.
       Of his work in the Thung Kula Ronghai, he said: "Hopefully, the changes observed here can provide an early warning system for the rest of the country." He hopes his work will help to develop a sound scientific model for farming in a more threatening environment.
       While a definitive answer will take years of careful study, the climatologist said the country should expect more extreme weather in the years ahead as rising ocean temperatures and diminishing rainforests cause shifts in global climate patterns.

Thai farmers "can win with global firms"

       Investment in agriculture by transnational corporations could help farmers in developing nations such as Thailand,the United Nations says.
       Large-scale investment by agri-giants would help modernise and commercialise the sector, the United Nations Conference on Trade and Development (Unctad) said in a report.
       The body says in its "World Investment Report 2009", released yesterday, the involvement of agri-giants could provide much-needed funding and expertise.
       "Investment and contract farming could be a win-win strategy [for governments]," said Nagesh Kumar, director of macroeconomic policy and development at the UN Economic and Social Commission for Asia and the Pacific (Escap).
       Contract farming is when foreign supermarkets or food processors agree to buy crops from local farmers.
       The report said that under such arrangements, the companies transfer skills to the farmers and link them to global markets. The transnational giants also provide seeds and technologies.
       Foreign direct investment in which transnational firms own assets and land could also boost productivity, the report said, adding that many developing governments have been slow to realise the benefits.
       On the downside, job losses and excessive dependence of farmers on the companies to supply input or buy produce could result.
       In promoting contract farming, host countries should try to safeguard the interests of farmers, the report said.Model contracts would protect farmers in their negotiations with the companies.
       Chanin Meepokee, director of Thammasat University's economic research and training centre, said the government would find it hard to take such advice.
       Farmers ended up losing in many contract farming deals because they lacked access to market information.

ICCO sees less surplus

       The International Cocoa Organisation (ICCO) has cut its global 2009-10 cocoa surplus forecast due to an improving economic outlook, its chief Jan Vingerhoets told Reuters financial television yesterday.
       The London-based ICCO has cut its 2009-10 global cocoa surplus forecast to between 25,000 and 50,000 tonnes if weather conditions are normal, Vingerhoets said.
       In April, Vingerhoets had forecast a global cocoa surplus of more than 100,000 tonnes.
       But he said an improving global demand outlook led the ICCO to scale back the forecast surplus.
       "We can be more optimistic about economic recovery in the coming crop year, starting in October," Vingerhoets told Reuters financial television in an interview."The demand outlook is better than in April."
       He also referred to concerns over the impact of the El Nino weather pattern on cocoa production in countries such as Ecuador and Indonesia, and worries over production in top grower Ivory Coast, including the effects of pest and disease.
       Vingerhoets said that if production was lower than expected, due to the impact of El Nino or slowing output in Ivory Coast, then the world could slip back into a deficit of cocoa of around 50,000 tonnes in crop year 2009-10.
       Vingerhoets said he expected global cocoa demand or grindings to rise by 1.5-2.0% in the 2009-10 crop year starting on October 1, compared with the previous year, aided by the improving economic outlook.
       He forecast that benchmark ICE cocoa futures would move in a $2,500-3,500 range during the coming crop year.
       ICE futures were up $27 at $3,125 per tonne early yesterday.
       Speaking on the sidelines of ICCO meetings in London, Vingerhoets said he expected Vietnam and Sierra Leone to join the organisation soon.
       He also said plans to move the ICCO to Abidjan in Ivory Coast had been shelved, and the body would continue to be based in London for the time being.

Crop insurance programme not expected to hit rice exports

       Thailand's new crop insurance programme will not affect the country's position as the world's leading rice exporter, say local academics.
       Somporn Isvilanonda, an economist with Kasetsart University, said the crop insurance programme was in line with market principles while still reassuring farmers of receiving a fair price.
       For years, the government has supported the prices of key crops such as rice by allowing farmers to pledge their crops with the Bank for Agriculture and Agricultural Co-operatives at set prices.If market prices fall below the mortgage price, then farmers can transfer their crops to the state. On the other hand, if market prices stay above the mortgage price, farmers can sell their crops in the open market and pay off the bank directly.
       In practice, mortgage prices have often been set to subsidise farmers, resulting in upfront outlays for the government of more than 100 billion baht per year.
       The new system is an insurance programme under which the government will pay farmers the difference between market prices and guaranteed prices for a limited quantity of crops. The change will slash the state's upfront costs and indirect expenses such as storing pledged crops.
       Benchmark prices will be announced on the 1st and 16th of each month.
       Volatile global prices and rising production costs threaten small farmers,which could lead to Thailand's agricultural sector being dominated by large producers, said Mr Somporn.
       Mortgage prices jumped from 7,000 baht per tonne of paddy in 2004 to 14,000 baht in 2008 as global prices rose.
       But the price rise and the price mortgage programme led farmers to increase production with too little consideration for quality and efficiency, said Mr Somporn. As product quality fell, the country lost competitiveness to countries such as Vietnam, the world's secondlargest rice exporter, he added.
       Top-quality Thai rice still enjoys a premium of about US$100 per tonne over Vietnamese rice in the global market,he said. But some farmers have been prompted by high pledging prices to cultivate lower-grade, faster-growing strains for quick returns, to the detriment of the overall industry.
       Only 40% of the 100 billion baht committed to the rice mortgage programme in previous years is estimated to have actually reached the hands of farmers,he added. In his view, the insurance programme is likely to be much better at directing funds to farmers and at cutting waste and corruption.
       Ennoo Suesuwan, the acting president of the Bank for Agriculture and Agricul-tural Co-operatives, said guarantee prices under the insurance programme would be based on average prices sampled at different markets across the country.
       Guarantee prices should be within 5% of market prices, with export prices and Chicago futures prices also being used in the calculation.
       Insurance will be offered free to registered farmers for now. But in the future,insurance coverage might be free for up to 25 tonnes of produce per customer,with a guarantee fee being charged for coverage of additional produce, he said.

THAI FARMERS MAY GET HURT BY ASEAN FTA; TIGHT CONTROL NECESSARY

       With trading being liberalised among Asean countries next year, Commerce Minister Porntiva Nakasai is planning to propose that Prime Minister Abhisit Vejjajiva make rice-crop management part of the national agenda.
       The move is aimed to stabilise growth and rebuild the Kingdom's competitiveness once the Asean free-trade agreement goes into effect next year.
       Porntiva said the government needed to make the development of the rice industry part of the national agenda and cover issues such as planting, trading, marketing and stabilising price.
Under the Asean Free Trade Agreement, import tariff on rice will be cut to zero among Asean members from early next year. However, farmers could end up bearing the brunt of things with rising production costs, lower yields and low development in the industry.
       The minister said the national agenda should include measures to stop rice from neighbouring countries from flooding the Thai markets.
       Porntiva said Thailand should prepare for the free-trade agreement by complying with the open-market scheme as well as setting up clear-cut measures that prevent vast amounts of cheap goods from neighbouring flooding the Thai market.
       Next month, the Foreign Trade Department will come up with concrete measures to control rice imports, including sanitary standards and stringent border controls.

Thai rice policy shift may depress prices

       For the first time in decades, Thailand,the world's biggest rice exporter, will not buy directly from farmers in the coming harvest season, a shift likely to prompt a jump in exports that will push down world prices.
       It marks a dramatic reversal of fortune over the last year for the rice market,for which global prices surged along with those of other food staples in early 2008 as funds flooded into commodities on speculation of rising demand.
       A flood of rice from Thailand, on top of rising sales from No.2 exporter Vietnam and increased output from Burma and Cambodia, could quickly push benchmark export prices down by a quarter to $400 a tonne or lower, analysts and traders said.
       "If there is no weather catastrophe or any sudden drought, I expect Thai rice prices to fall to around $380 to $400 a tonne by the end of this year due to rising supply," said Chookiat Ophaswongse, president of the Thai Rice Exporters Association.
       For the moment, benchmark 100%B grade white rice is holding at $540 per tonne, helped by the government's decision to extend its buying programme until the end of September to face off protests by farmers.
       That is exactly half the record high of $1,080 per tonne seen in April 2008 at the peak of last year's world food crisis. Thai prices have slumped since early 2009 when demand subsided as most big importers had secured supplies.
       The fall was in line with global trends as supply in key producing countries is on the rise, including in the United States, the world's fourth-biggest rice exporter.
       US rice futures on the Chicago Board of Trade (CBOT) for November ended down 35 cents at $13.16 per hundredweight on Monday on prospects of a bumper American crop.
       In Southeast Asia, the world's main rice-producing region, supply should rise sharply by the year-end.
       Vietnam expanded its rice stockpiling scheme last week, saying it would buy another 500,000 tonnes on top of the 400,000 it bought in August to stop prices falling under the 35.99 million tonnes the US Department of Agriculture (USDA) says the country will produce this year.
       But Thailand has said it will no longer support farmers by buying directly from them, as it has done for years, citing the need to cut huge storage costs.Consequently, all of the 2009-10 crop of perhaps 20 million tonnes will hit the market.
       Instead of using a pledging scheme,which offered high prices to win political favour in rural communities, the government is introducing an options programme. Authorities will set a benchmark price and pay farmers the difference if they are forced to sell to millers at a price below that level.
       "This means there is no big buyer such as the government to drain some supply out of the market to help lift prices any more and prices could drop sharply," said Kiattisak Kanlayasirivat of Novel Agritrade (Thailand) Co Ltd.
       Moreover, the rice the government has bought in the past and now holds in its stocks will add to the downward pressure on prices - since traders know it will be released at some point.
       Thailand is holding its highest-ever stock of 7 million tonnes and has failed to push ahead with plans to reduce it.
       In India, rice stocks have risen to 30.1 million tonnes from 23.2 million a year ago.
       Traders said that was enough to satisfy domestic consumption but not enough for India to return to the export market in a big way, especially as the monsoon rainfall in rice-growing northwestern states was about 21% lower than normal.
       In the past, before the supply problems that forced up prices last year,India vied with Vietnam to be the second-biggest exporter after Thailand.
       However, other countries are starting to add to supply.
       Burma in particular is re-emerging as a player. It aims to export up to one million tonnes in the fiscal year to next March. As of late August it had exported 600,000 tonnes, compared with 666,400 tonnes in 2008-09 and 358,500 tonnes the previous year.
       All this will put pressure on prices to fall.
       "There is no reason for prices to rise. What we want to know is how much they will fall as buyers realise there will be plenty of rice next year,"said Sumeth Laomoraporn, president of CP Intertrade in Bangkok.
       The fall in prices should stimulate export demand, traders said, especially if big importers start to rebuild stocks next year after struggling to find grain at affordable prices in 2008.
       Thailand could be a beneficiary in terms of export volume.
       "The new Thai intervention plan should bring down export prices and could help Thailand grasp bigger market shares," said Paka-on Tipayatanadaja,an analyst at Kasikorn Research Center in Bangkok.
       According to KResearch, Thai exports in 2010 could reach 10 million tonnes,a record high.
       Chookiat of the Thai Rice Exporters Association said 2010 exports could go even higher than 10 million tonnes if the government managed its stocks wisely, selling gradually without flooding the market.
       Vietnam could also export a record amount this year,6 million tonnes,and that could go even higher in 2010 if the Philippines, one of its traditional buyers, stepped up its buying as prices fell, Paka-on said.

Cambodia joins ANRPC

       Cambodia has joined the Association of Natural Rubber Producing Countries in the hope of further developing the nation's rubber industry,a government official said yesterday.
       Ly Phalla, director-general of Cambodia's directorate of rubber, said the ascension to the inter-governmental organisation would bring its burgeoning industry new technology and help with production and marketing.
       The Cambodian government had privatised some 41,600 hectares (102,800 acres) of state-owned rubber plantations in recent years, Ly Phalla said.
       Cambodia is the 10th country to join the rubber association, which includes China, India, Indonesia, Malaysia, Papua New Guinea, Singapore, Sri Lanka, Thailand and Vietnam.

CP'S NEW FACILITY GIVES RICE PRIDE OF PLACE

       CP Trading Group plans to establish a Bt3.5-billion rice processing and trading facility in Ayutthaya province to ensure "single-standard quality" and facilitate future expansion.
       Set to be complete next year, the centre will be located on about 550 rai and will include the group's third rice processing and packing plant, with a total capacity of 1.08 million tonnes. Rice will be directly shipped from a river port nearby and an inland container depot.
       CP Trading's head office will be moved to the location from Bangkok, but a Bangkok office will be maintained as a business coordination unit. Started in 2007, the project is aimed at positioning the rice trade as the firm's core business.
       Prasit Damrongchietanon, chief executive officer of CP Trading Group, said completion of the project will boost the group's rice production capacity to 2.5 million tonnes.
       The firm already has two processing facilities in Ayutthaya and Pathum Thani and three rice mills in Buri Ram, Kamphaeng Phet and Suphan Buri.
       Prasit said the group's total rice trade volume is forecast to reach 1 million tonnes this year, with exports and domestic sales contributing 50 per cent each.
       "CP Group has focused on rice, developing the necessary fundamentals to ensure this business milestone is reached and strengthening the group's competitiveness," Prasit said.
       CP Trading Group manages its rice trading through CP Intertrade, its marketing arm, and markets the rice under the Royal Umbrella brand. The brand is ranked as the country's fifth-biggest export product, with total volume of 600,000 tonnes worth Bt9 billion shipped last year. However, this is forecast to drop to 500,000 tonnes, worth Bt8.5 billion, this year in line with the slowdown in the country's overall rice exports.
       Sumeth Laomoraphorn, president of CP Intertrade, said the company exported 265,591 tonnes of rice worth Bt6.3 billion during the first seven months of this year.
       The company's domestic rice sales are projected to reach 530,000 tonnes worth Bt11.8 billion this year. Its total sales reached 287,644 tonnes of rice worth Bt7.15 billion in the first eight months.
       The Kingdom's total rice exports are expected to reach 8.5 million to 8.7 million tonnes this year.
       Prasit said CP Trading Group has had to prepare a new rice-business plan to cope with increased competition from both existing traders and newcomers. However, the business still has room for growth in the areas of bagged rice and value-added rice products, he said.
       The tougher competition, however, will have a positive impact on the industry, Prasit said, as it will force traders to improve the quality of their rice and to develop new marketing strategies. The rapid expansion of modern-trade channels in Thailand has been a key factor in the switch to bagged rice, which has become popular among consumers, he said.
       The rice business is now managed
       by a young generation of highly
       educated executives who have em-braced modern-trade models to boost
       sales, Prasit said. This has not only widened market opportunities but
       also led to rapid changes in trading
       patterns, as well as business diversification.
       "The Kingdom's major rice exporters are not the established traders of old, but newcomers formed by small local rice traders and millers," Prasit said, noting, however, that quality is still the most important factor.
       Prasit said CP Trading Group is considering looking for business partners to launch new rice products. This strategy, he said, will support the group's goal of achieving complete upstream-through-downstream production.
       The company is also considering a plan to list on the Stock Exchange of Thailand, he said.

Farmers assured of equal benefits

       LOP BURI : Farmers have been assured that they would receive equal benefits under the government's crop price guarantee scheme, including those who do not have any farmland of their own, says Prime Minister Abhisit Vejjajiva.
       DISRUPTION BID: Security officers force back red shirt demonstrators as they try to disrupt Prime Minister Abhisit Vejjajiva’s visit to Lop Buri’s Tha Wung district yesterday.
       Mr Abhisit spoke to farmers yesterday during his visit to the province, where the prime minister pre-recorded his Chuea Man Prathet Thai weekly programme, which will be broadcast today.
       About 800 farmers registered under the crop price guarantee scheme in Tha Wung and Muang districts attended the meeting.
       Around 23,000 farmers in this central province have joined the scheme.
       The PM stressed that landless farmers were also guaranteed inclusion in the scheme as long as they grew crops and the community committee could verify their rights.
       Mr Abhisit said farmers would be given equal access to the government's subsidies when the pricing of the farm products is done.
       Under the traditional crop price mortgage programme, only about 300,000 farmers out of a million-strong had enjoyed the benefits of the programme. The others were left out in the cold due to a limited number of mortgage quotas.
       Rather than purchasing the crops outright under the current mortgage scheme and storing them in state warehouses, the government will make up for the difference between the guaranteed and the market prices, significantly reducing the total cash outlay and storage costs paid by the state.
       A farmer will be guaranteed a crop price quota of between 20 and 25 tonnes, said Mr Abhisit.
       "The government can't afford to raise its guarantee ceiling more than this because it would create too much burden on taxpayers."
       However, Mr Abhisit conceded that the scheme might not eventually be successful and could lead to a fall in popularity of his government. " But the government would proceed with it for the sake of the majority of farmers."
       Some 5.16 million farming families in the country have registered for the scheme so far, says the Agriculture and Cooperatives Ministry.
       The ministry expected the scheme to cover 22.7 million tonnes of paddy in the first crop, 4.2 million tonnes of maize, and 23.58 million tonnes of tapioca.
       The government, through the Bank for Agriculture and Agricultural Co-operatives, plans to spend a total of 43 billion baht on options for rice, maize and tapioca in the 2009/2010 harvest.

More parboiled rice to South Africa

       Thai exporters of parboiled rice to South Africa have benefited from a ban on such exports by India.
       A trade mission led by Commerce Minister Porntiva Nakasai is visiting South Africa, which has placed an order of 650,000 tonnes of parboiled rice. The deal's export price is quoted at US$620 (Bt21,100) per tonne, making a total value of Bt13.75 billion.
       With the order, Thailand becomes the world's biggest parboiled rice exporter, with parboiled rice accounting for 55 per cent of the country's total rice exports.
       Porntiva said the ministry would soon propose to the Rice Policy Committee that it release the government's paddy-rice stockpile. The move would support producers of parboiled rice for export.
       "The government must facilitate rice exports, but exporters cannot find paddy rice to produce parboiled rice. The lack of paddy rice supply could halt the Kingdom's exports," he said.
       In addition, the Public Warehouse Organisation also signed a memorandum of understanding with Kwazulu-Natal province, the logistics-promotion zone in South Africa. The contract calls for investigating the possibility of setting up a Thai distribution centre in the country. The South African government has thrown its full support behind the idea, including tax exemptions and a reduction in import inspection and procedures on Thai goods.
       "If successful, it will be Thailand's first distribution centre in the region," Porntiva said.
       Accompanying the trade mission, Thai Rice Exporters Association president Chookiat Ophaswongse said India was likely to extend its rice-export ban until next year's first quarter.
       "India's export ban will benefit Thai parboiled-rice exports," said Chookiat.
       The proportion of the Kingdom's parboiled-rice exports has increased from 40-42 per cent of total rice exports to 55 per cent since India implemented the export ban.
       Total parboiled rice exports amounted to 5 million tonnes last year. Its proportion of total rice exports will increase to 60 per cent in the near future.
       Chookiat added that the prospects for jasmine rice in south Africa was not bright, because of its high price. South Africa imports only about 7,000 tonnes of Thai jasmine rice per year.

Nepal villagers on climate change frontline

       Three years ago Naina Shahi's husband left their small village in rural Nepal to seek work in neighbouring India, leaving her to bring up their three children alone.
       The dry winters and unpredictable monsoons Nepal has experienced in recent years had hit crop production on the couple's land plot in the foothills of the Himalayas, forcing them to look for other ways to feed their family.
       For the past two years, their crop has failed entirely and Shahi now buys rice on credit from a local shopkeeper while she waits for her husband to return to their village with his earnings.
       "My husband stopped farming because this place is not good for growing crops. We needed to earn money to feed the children," Shahi,35, said in the remote village of Bhattegaun in midwestern Nepal.
       "There is not enough rainfall for the crops to grow well and we have to walk for two or three hours every day to get water."
       International aid agency Oxfam says Nepal's changing weather patterns are threatening the livelihoods of hundreds of desperately poor communities already struggling to produce enough food to survive.
       In a new report released recently,100 days before a conference in Copenhagen aimed at sealing an international accord on fighting climate change, Oxfam warns of the potentially devastating effects on people in the Himalayan nation.
       "The majority of Nepal's population are poor farmers reliant on rainfall and occupying small parcels of land that can barely produce enough food for the family," it said.
       "They often live in areas most at risk to floods and landslides and are more reliant on local natural resources such as forests and water.
       "Even small changes to rainfall patterns can have devastating consequences on their crops," said the report,based on interviews conducted in rural communities across Nepal in February and March this year.
       Almost a third of Nepal's 28 million people live below the poverty line and the UN's World Food Programme said recently there had been a "sharp and sustained decline in food security" in recent years.
       It blamed a rise in food prices and a series of unusually dry winters.
       This year Nepal's winter rains failed altogether, leading to severe water shortages and power cuts of up to 18 hours a day in the capital as hydroelectric projects struggled to meet de-mand.
       There is no firm scientific evidence linking the winter droughts to climate change, and rapid population growth and a lack of development during the 10-year civil war have contributed to Nepal's rising food shortages.
       But low winter rainfall and the late onset of the monsoons are in line with what climate change scientists have predicted for the region, and Oxfam says Nepal must act now to help its citizens adapt.
       "There is no time to waste and nothing to lose," said country director Wayne Gum.
       "The government needs to do more to support local communities. Even if we're wrong about climate change and I don't think we are - people will always benefit from better water management systems."
       The residents of Bhattegaun, a settlement of around 150 mud huts deep in the forest, know little about the science behind climate change.
       But they say changing weather patterns are already forcing them to change their way of life.
       "These days, the weather is getting much hotter and the rains don't fall when they are supposed to," said 59-yearold Ram Bahadur Himal.
       "Landslides washed away our last plot of land so we moved here and settled in the forest. We ploughed the land, but since we moved here, there has been no regular rainfall."
       Most men of working age have left to seek casual work, leaving the backbreaking tasks of fetching water and firewood to the women.
       Padam Bahadur Sunar works in India for between five and eight months of the year, earning up to 25,000 rupees (11,000 baht) a month which he sends home to feed his parents and eight siblings.
       The 31-year-old recently got married,but he will soon be forced to leave his new bride behind when he returns to his work as a driver on Indian construction sites.
       "There has been less rainfall over the years and there is no irrigation for the farmland," he said."Without going to India I wouldn't be able to feed my family."

2009 VN RICE EXPORTS MAY HIT RECORD HIGH

       Vietnam, the world's second-biggest rice-exporting nation, may ship a record 5.7 million metric tonnes this year, 4 per cent more than previously forecast, according to a projection from the US embassy in the Southeast Asian nation.
       There has been an "increase in the area planted for the autumn and winter crops", wrote Quan Tran of the embassy's agricultural attache's office in a report released last week.
       "The revision was also based on the current rice-trade situation and the year-to-date exports," the report said.
       Vietnam exported 4.7 million tonnes of rice in the first eight months of the year, 43 per cent more than a year earlier, according to preliminary estimates from the General Statistics Office in Hanoi. Exporters totalled 4.65 million tonnes last year, and reached a record 5.17 million tonnes in 2005.
       Overall, Vietnam's paddy output would total 36 million tonnes this year compared with a previous estimate of 35.9 million, according to the embassy, which issues estimates separately from the Foreign Agricultural Service's Office of Global Analysis.
       The Foreign Agricultural Service last month increased its forecast for Vietnam's rice exports to 6 million tonnes this year, from 5.5 million tonnes, citing an "aggressive export pace and increased government targets."

Farmer fund poll stokes resentment

       The lead-up to the Farmers' Reconstruction and Development Fund committee election has become a hotbed of corruption claims, conflicts and innuendo.
       Tensions are running high as the poll looms because the outcome could result in big changes for an organisation fraught with scandal, a source said.
       The fund, established in 1999, was intended to oversee the transfer of farmer debts from financial institutions to the fund, which would shoulder the debt burden for farmers in accordance with the Farmers' Reconstruction and Development Fund Act.
       But conflicts of interest,political intervention and alleged abuse of authority soon began to emerge.
       Over the past decade,16 people have held the office of secretary-general of the fund, for an average of just eight months each.
       The latest, acting secretary-general Sangsidh Piriyarangsan, has vowed to leave office unless new members from farmer groups, who will be elected on Sept 13, offer him their full cooperation.
       The committee is made up of 41 members,20 of whom are farmer representatives. The rest are from the government sector and specialists from the private sector. The committee is chaired by the prime minister or his assigned deputy.
       Democrat MP Somkiat Pongpaibul,who has been involved in farmer movements, coined the term "imperial farmers" to describe the farmers' representatives elected to the fund and who were seduced by the power and forgot their roots and the plight of others.
       Once elected, these so-called imperial farmers gave in to temptation to seek profit for themselves instead of assisting their fellow farmers.
       The source said Mr Sangsidh's policies, from restructuring to restricted access to business class air travel for members, has enraged these privileged farmers.
       In the past, there were strong ties between the secretaries-general and farmer representatives, and then Mr Sangsidh took the helm.
       When Mr Sangsidh, a former Chulalongkorn University academic,assumed office he tried to foster improved relations among the feuding
       farmer factions. He was unsuccessful.
       The source said a rift between Mr Sangsidh and the farmer representatives became tense when he became the first secretary-general to dare to freeze the budget demanded by the farmer network organisation related to the farmer representatives. Mr Sangsidh required separate requests by smaller groups of farmers,the source said.
       Mr Sangsidh's policy to expand the number of Farmers' Reconstruction and Development Fund (FRD)branches from 31 to 76- which are seen by farmer representatives as an effort to reduce the power of the representatives - was also a trigger for farmers' demonstrations against him.
       Farmer representatives from the Central Plains and the Northeast are recognised as big guns in the power play over the fund.
       Trouble started to brew when a complaint was lodged with the Administrative Court declaring Mr Sangsidh incompetent to run the fund.
       The complaint was based on his double employment - he also works as an economics lecturer at Chandarakasem Rajabhat University.
       The court dismissed the complaint.

Sweetener for industrial sugar users

       Industrial sugar users will gain access to the cheaper domestic sugar quota if export prices surge above local ones,the Office of the Cane and Sugar Board (OCSB) has pledged.
       Food and beverage manufacturers for the export market normally purchase sugar from the export quota, which his-torically has been priced lower than domestic sugar. However, world sugar prices have been surging this year because of a global supply shortfall.
       The ex-factory price of white sugar is now at 20 baht per kilogramme, about two baht more than the export sugar price.
       Prasert Tapaneeyangkul, the OCSB secretary-general, said industrial users now using the export quota could seek domestic sugar if export prices become more expensive.
       This year, about 1.9 million tonnes of sugar are reserved for domestic con-sumption, with 63% for household usage and 37% for industrial users who serve the local market.
       "We also have a surplus of about 590,000 tonnes left from last year's allocation for domestic sale that should be enough to accommodate food and beverage exporters' demand," Mr Prasert said.
       Exporters have filed requests for 370,000 tonnes of export sugar this year.While 57% have already exercised their rights, the remaining 43% may or may not use their allocated quotas if export sugar becomes more expensive.
       However, operators who shift to use the domestic quota will lose their right to seek export sugar next year.
       "If exporters shift to use domestic sugar, the Cane and Sugar Fund, cane farmers and sugar millers could also enjoy better income," Mr Prasert said.
       More usage of domestic sugar means a higher multiplier to value-added tax collection, which goes to pay down the debt of the fund, now at 20 billion baht.
       The shift would also raise export sugar supply. With global prices at a 28-year high and likely to rise further, the higher revenue in the export market will also increase farmers' and millers' incomes.
       Surat Thadachawasakul, the general manager of the Thailand Cane and Sugar Corporation (TCSC), which oversees sugar for export, said export prices were likely to keep rising.
       "The latest reports indicate that the world sugar deficit may be wider than earlier forecast," he said.
       "Brazil, the world's largest sugar producer, is expecting to deliver less than forecast to the world market while India,the world's largest sugar consumer, is expected to require more export sugar from a previously forecast shortage."

Ethanol makers seek cassava

       Local ethanol manufacturers are looking to use more cassava as a raw material instead of expensive molasses in order to cut costs and compete with mainstream fuels, according to Sirivuthi Siamphakdee, president of the Thai Ethanol Manufacturers Association.
       Ethanol, which is used for blending with petrol to make gasohol, can be made from molasses, derived from sugar, or cassava. Only five of the 17 local producers use cassava and account for one-third of local ethanol capacity.The other ethanol producers also operating sugar businesses.
       Chalush Chinthammit, assistant vicepresident of Khon Kaen Sugar Plc (KSL),maintains that the rising price of ethanol has nothing to do with the sugar price hike as molasses output in the country remains sufficient for domestic demand.
       Mr Sirivuthi said ethanol price rises were a direct impact of the dry weather in India, the world's biggest cane producer, which reduced its sugar and molasses outputs. This led to a rise in overseas molasses demand from Thailand.
       "This is an opportunity for molasses exporters," he said."In the past they would sell molasses at low prices for distillers locally and overseas, but ethanol demand is rising, not only in Thailand but across Asia for green fuels."
       Ethanol producers have been the country's second largest molasses users since 2007.
       Local ethanol capacity is now 3 million litres per day and producers are paying US$145 per tonne for molasses,up from $115 a year earlier.
       Ethanol made from cassava costs 21 baht a litre while molasses-based variety is 27 baht, Mr Sirivuthi said.
       "To make sure gasohol prices can compete with petrol, we have to find out how to shift production to new materials at a lower cost," said Mr Chalush."However, ethanol producers are also concerned that if they use more cassava it would lead to rising prices of cassava too."
       Last year, Thailand produced 2.8 million tonnes of molasses, with 1.2 million consumed by distillers, the ethanol sector 600,000 tonnes, monosodium glutamate and animal feed 500,000 tonnes,and exports 500,000 tonnes.
       Jetsada Wongwatanasin, managing director of the Thai Sugar Ethanol Co said the company was now conducting a study to compare costs between molasses-based and cassava- or mixeduse ethanol to cut production costs.
       "We expect molasses prices would gradually decline at the beginning of the new harvesting season in December and stay low until April, if the sugar output shortage is not more severe,"said Mr Jetsada.
       Thailand's sugar output in the 2009-10 harvest is forecast to rise to 75 million tonnes from an estimated 67 million this season.

BID TO PROTECT IDENTITY OF JASMINE RICE

       The Foreign Trade Department is cooperating with three Chinese organisations to protect Thai jasmine rice from deliberate contamination in the mainland, a practice that has damaged the reputation of Thai rice.
       It is hoped the measure will prevent Thai jasmine rice from being mixed with low-grade rice, as well as increase sales of Thai rice in China. Chutima Bunyapraphasara, the department's director-general, said China's Customer Information Quality agency, QTS Packaging and Assembly Service and State Administration for Industry and Commerce have committed themselves to protecting Thai jasmine rice and its reputation.
       The agencies will closely inspect Chinese rice brands to see whether they have been mixed with Thai jasmine rice and sold under their own brands. The agencies will also check whether Thai jasmine rice brands have been copied in the market.
       China is the largest importer of Thai jasmine rice (Hom Mali).However, due to its high price, Chinese importers and traders have combined jasmine rice with lower-grade rice typers to attract more buyers. Thai jasmine rice sold overseas have a special trademark certifying it as 100-per-cent jasmine rice by the Foreign Trade Department. The certification includes the words "Thai Hom Mali Rice Originated in Thailand."
       According to the department's survey of the Chinese market, Chinese rice is quoted at 3 to 8 yuan (Bt15-Bt40) per kilogram. Mixed rice passed off as jasmine rice is quoted at a retail price of between 8 and 12 yuan a kilo, while premium Thai jasmine rice is quoted at 13 to 18 yuan a kilo. Chutima said the Thai government would accelerate its quality-promotion efforts for Thai jasmine rice in China and other targeted markets as this rice has created better returns from exports than other kinds.
       Thai white rice is traded at US$564 (Bt19,180) per tonne, while jasmine rice is quoted at $979 per tonne.
       China is an important market for Thai jasmine rice due to the country's high growth rate and the strong preference for fragrant rice among consumers there. Most Chinese people believe in the high quality of Thai rice and favour Thai Jasmine rice, said Chutima.
       However, consumers there do not have strong recognition of the difference between Thai jasmine rice and other kinds of fragrant rice. Therefore, some unscrupulous traders have mixed Thai jasmine rice with other kinds to make a profit. To increase understanding of Thai jasmine rice and Thaiowned jasmine rice brands, the department will educate people via campaigns in provincial newspapers and on television. The focus is on Guangzhou, Shenzhen and Shanghai.
       In addition, Thailand will invite representatives from China to go on field trips here and learn about Thai rice varieties.