Rice Stocks Reach 12-Year High as Food Costs Drop 全球稻米存量達12年高點
Rice Stocks Reach 12-Year High as Food Costs Drop: Commodities
ByLuzi Ann Javier&Supunnabul Suwannakij-Jul 8, 2013 11:14 AM CT
Rice stockpilesare expanding to the highest level in 12 years as production increases to a record, adding to a worldwide surge in agricultural output that is poised to diminish the $1.1 trillion global food-import bill.
Reserves will gain for a seventh year, rising 2.7 percent to 108.6 million metric tons in 2013-2014, the U.S. Department of Agriculture estimates. Output will climb 1.9 percent to 479.2 million tons, exceeding demand by 2.8 million tons. Prices for 5-percent broken Thai white rice, anAsian benchmark, will drop 13 percent to $455 a ton by December, according to the median of eight trader and analyst estimates compiled by Bloomberg.
A farmer plants rice seedlings by hand as an apartment building is reflected in the paddy field in Iksan, South Korea. Increasing Asian production will be partially offset by less supply in the U.S., the fourth-biggest shipper. Photographer: SeongJoon Cho/Bloomberg
A worker carries bags of rice as other workers look on at a wholesale market in Shanghai. China, the biggest consumer and importer, will buy a record 3 million tons, according to the U.S. Department of Agriculture. Photographer: Tomohiro Ohsumi/Bloomberg
Combined global output of rice, corn, soybeans and wheat will advance to a record as fields in the U.S. andEuroperecover from droughts last year, according to the USDA. Wheat, corn and soybeans are already in bear markets, contributing to two consecutive months of declining world food costs tracked by theUnited Nations. Inventories of rice, the staple for half the world, are now equal to almost three years of annual trade.
“The stocks are so big, I don’t think anyone can talk about a bottom in prices,” said Geneva-based Mamadou Ciss, the president of Alliance Commodities SA, who has traded rice for almost three decades. “There is oversupply for sure in the world. The crops are pretty good everywhere.”
The Thai grade fell 10 percent to $524 a ton this year as the Standard & Poor’s GSCI Agriculture Spot Index of eight commodities retreated 16 percent. The MSCI All-Country World Index of equities advanced 5.2 percent and a Bank of America Corp. index shows Treasuries lost 3.5 percent.
Expandingrice productionand stockpiles mean less demand for imports, which the UN’s Food & Agriculture Organization inRomeestimates will drop to 37.6 million tons, contracting for the first time in four years. Global inventories expanded 44 percent since 2006-2007, USDA data show.
Government subsidies are encouraging more production even as prices decline and inventories expand.Thailand, once the biggest exporter, spent 588.7 billion baht ($18.9 billion) stockpiling 27 million tons of milled rice since October 2011 under a policy that paid farmers as much as 50 percent more than local prices. Domestic output will expand 4.5 percent to 21.1 million tons in 2013-2014, the USDA estimates.
Thailand lost about 137 billion baht through the buying program in the last crop year, according to a government estimate, and Moody’s Investors Service said last month the policy is undermining efforts to balance the budget by 2017. The government kept the purchase price at 15,000 baht a ton this month, reversing a proposal to lower it to 12,000 baht, and said that it would keep selling from stockpiles.
India, last year’s largest exporter, increased the minimum price it pays farmers to a record. That will mean a 6 percent drop in shipments to 9.5 million tons in the 12 months to March 31, according to Vijay Setia, a former president and member of the All India Rice Exporters Association. The USDA says Indian output will rise 3.8 percent to a record 108 million tons.
Increasing Asian production will be partially offset by less supply in the U.S., the fourth-biggest shipper. The nation’s output will drop 4.7 percent to a two-year low of 6.04 million tons, reducing reserves to the smallest since 2009, the USDA predicts. Rough-rice futures on the Chicago Board of Trade climbed 2.9 percent to $14.955 per 100 pounds since reaching an eight-month closing low of $14.54 in March.
China, the biggest consumer and importer, will buy arecord3 million tons, according to the USDA. The country is buying more because it costs less than domestic supply, the USDA’s Economic Research Service unit said in areportJune 14. The discovery of cadmium, a toxic metal, in some rice from southern China also boosted external demand, according to Beijing Orient Agribusiness Consultant Ltd., a grain research company.
Global demand for imports is contracting, according to the FAO. Purchases byNigeria, the largest buyer last year, will drop 10 percent to 2.7 million tons. Imports byIndonesia, the third-biggest, will slide 28 percent.
“It’s a buyers’ market with ample supplies of rice and other grains around the globe,” said Kiattisak Kanlayasirivat, a Bangkok-based director with Novel Commodities SA, which trades about $600 million of rice a year.
Global production of wheat will be the second-biggest on record, rising 6.1 percent to 696 million tons, the USDA estimates. Farmers will reap the most soybeans and corn in history. Combined output of those three crops and rice will expand 7.7 percent to 2.42 billion tons, according to data compiled by Bloomberg from USDA predictions.
U.S. farmers, the biggest agricultural producers, planted the most corn since 1936 this year after prices advanced to a record in August. The nation’s wheat acreage reached a four-year high and growers sowed the most soybeans ever.
The FAO’s index ofworld food pricesfell 0.9 percent in June, with the cereals gauge declining for the eighth time in nine months. Costs are 11 percent below the all-time high reached in February 2011. The UN body is anticipating a global food import bill of $1.1 trillion this year, 13 percent less than the record $1.26 trillion reached in 2011.
“The supply estimates for grains are quiet staggering,”Abah Ofon, an agricultural analyst at Standard Chartered Plc inSingapore. “A lot of end users are sitting on the sidelines, waiting for prices to fall further or at least bottom.”