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10 Nov 2006

Agriculture

Glutinous Rice and Products: Export Increase, Price Surge (Business Daily No.1896)

Glutinous rice is widely popular in Thailand and is the staple food of the northeastern and northern people. Aside from direct consumption, glutinous rice is also a raw material used in liquor production, as well as glutinous rice flour being used in the food and snack industries. However, a point to note is that there has been growth in the number of factories that now use glutinous rice flour as a primary ingredient, particularly Japanese frozen food factories, in producing such delicacies as Moji, dumplings, etc. These factories focus on exports to Japan. Due to the fact that the elderly in Japan are rising in number as a proportion of the populace, demand for soft and instant foods that are easy to prepare is increasing accordingly. The expansion in Japanese frozen foods for export has increased demand for glutinous rice as a primary ingredient. In addition, glutinous rice strains are being developed that have higher quality to meet the demand. Entrepreneurs select the strain they require for a particular need and subsidize farmers to plant it. That is surely one way to enhance income for glutinous rice farmers and is also an opportunity to expand the glutinous rice market domestically, as well.
Since the beginning of 2006, the price of glutinous rice has risen higher continuously in accordance with increased exports. The export volume of glutinous rice and products in the first nine months of 2006 totaled 308,277 tons, with a value of THB4.653 billion. Relative to the same period of last year, this year's volume and value increased by 27.9 percent and 38.8 percent, respectively. This year is expected to see the volume and value of exported Thai glutinous rice and products reach record-breaking highs. It is expected that the export value for all of 2006 will reach 480,000 tons with a value of THB7 billion, over-year. Volume and value will rise by 30 percent and 38.5 percent. For the first nine months of 2006, the export value to China will have grown by five-fold. That is to say, the export value of the glutinous rice will reach THB 945.9 million, 4.8 times higher, over-year, because China needs glutinous rice as a primary ingredient in their snack and rice wine industries. Exports to China have been surging since 2004, which was the first year that China outpaced Malaysia, Indonesia, the USA and Taiwan in the import of glutinous rice. Those countries previously dominated the top positions in market demand for Thai ‘sticky rice'. The next highest ranked importers of Thai ‘sticky rice' are now Malaysia, Indonesia, the USA and Taiwan. All these countries import glutinous rice to supply direct consumption by Thai and other foreign workers from Southeast Asia in those countries. Interesting export markets for glutinous rice also include many countries in the Middle East because Thailand's exports of glutinous rice to these oil-rich countries remain relatively low, but growth in recent years has been worth noting. In addition, exports of broken kernel glutinous rice, as well as flour and starch, has been promising.
Demand for glutinous rice keeps increasing, both at home and abroad, thus raising the price in the market in 2006. The average price for long-grain glutinous rice in November 2006 reached a new high of THB9,746 per ton, up from an average of THB6,093 a ton in January 2006, and THB8,062 a ton in July, 2006. It is expected that the average price for long-grain glutinous rice in December 2006 will peak at THB 10,000 a ton, due to growing demand in both domestic and export markets. The overall output of glutinous rice in the crop year of 2006/2007 will increase only slightly. It is expected that, throughout 2007, the average price for glutinous rice will remain high, which will urge farmers to increase production in the next crop year. Another supporting factor for rising production would be continued support provided by both the public and private sectors concerned in promoting exports of both glutinous rice and derivative products. They are focusing on measures to improve varieties of glutinous rice yielding higher-quality rice to meet demand by consumers and processing plants, which will enhance the promise of future Thai glutinous rice exports.

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