Rice May Rally Sharply in Wake of Thai Election
July 4th, 2011Via: Bloomberg:
Rice prices in Thailand, the biggest exporter, may rally 56 percent by yearend as the party that won parliamentary elections implements a policy to buy the crop from farmers above current rates, according to a survey.
The export price may climb to $810 per metric ton by Dec. 31, according to a median forecast of six millers, exporters and traders today and yesterday, who commented after Pheu Thai won a majority in yesterday’s contest. “We are ready to implement all policies we have announced,” Yingluck Shinawatra, who will become Thailand’s first female prime minister, said yesterday.
Costlier rice from Thailand, which accounts for about 30 percent of worldwide shipments, may increase global food costs while making supplies from rival Vietnam more competitive. A Bloomberg survey last month, conducted during the campaign, suggested a gain to $750 per ton if Pheu Thai were to win.
“It isn’t only Thai prices that will go up, the rest of the world will have to follow,” Mamadou Ciss, chief executive officer of Hermes Investments Pte, said from Geneva. The price may jump $100 within two months and peak at $700, said Ciss, who correctly predicted in 2006 that prices would double.
Thai export prices are a benchmark for the industry. The price of the 100 percent grade-B variety, which is set weekly, was at $519 per ton on June 29, and has risen as much as 7.3 percent since outgoing Prime Minister Abhisit Vejjajiva called the election. Abhisit’s Democrat Party won 160 seats in the 500- member parliament while Pheu Thai took 264, with 98 percent of the vote counted.
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