Rice prices unlikely to return to record next year, Wailes says

Rice prices are unlikely to return to records next year as supplies from Thailand and Vietnam, the world’s biggest exporters, may be enough to cover Indian and Philippine shortfalls, an agricultural professor said.

“Globally, the market fundamentals are still relatively sound,” said Eric Wailes, a agricultural economics professor at the University of Arkansas. “I would be surprised if we hit the kind of prices that we had in the spring of 2008,” he said.

Rice stockpiles in Thailand were forecast by the US Department of Agriculture in October at 3.5 million metric tons for the 2009-2010 marketing year, up from 2.5 million tons in 2006-2007, before prices surged. Inventory in Vietnam will be 1.7 million tons, from 1.4 million tons in 2007, the USDA said.

“That didn’t exist going into the spring of 2008” when prices reached a record, said Wailes, who co-wrote a 1998 study that predicted global rice demand would exceed production in 2009-2010, which the UN Food and Agriculture Organization and the USDA forecast this year.

Food price protests swept the globe last year after fears of shortages prompted producers including India to cut rice exports and importers increased purchases. Futures traded in Chicago surged to a record $25.08 per 100 pounds in April 2008.

Vietnam aims to sell $1 bln bond by early 2010: source

Vietnam hopes to raise $1 billion by early next year in its long-awaited second international bond issue that will cap the coupon at 7 percent, a finance ministry official said on Tuesday.

The ministry wanted to sell 10-year dollar bonds before the end of the year but there might not be enough time to do so.

"Most of the money, about $700 million, would supplement the government's budget and the rest would be loaned to state-owned companies," said the official, who declined to be identified because he was not authorized to talk on the record to the media.

The government had already approved the bond sale and has chosen Barclays Capital, Citigroup and Deutsche Bank to advise on the issue.

Vietnam's only foray into the international capital market was in 2005 when it sold $750 million worth of sovereign bonds maturing in 2016.

Those bonds were trading with yields of 6.3-6.4 percent, compared with the original coupon of 6.75 percent, a bond trader said.

Two years ago the government approved another issue worth $1 billion but the sale has been delayed several times.

With the economy under pressure from the global slump, and the government extending parts of an economic stimulus package, many economists forecast the fiscal budget deficit will expand to 10 percent of GDP or larger, more than double last year's.

Questions have persisted for months about how the government would fund the deficit. Domestic dong-denominated government bond auctions have struggled this year, with the finance ministry's yield ceiling too low for the market.

Vietnam is also trying hard to boost its foreign exchange reserves and said last month it would borrow $1 billion from the World Bank this year and next, and also $1 billion annually from Japan from 2010 to 2012.

PTTEP: Oil rig fire now out

The fire at a leaking PTTEP oil rig in the sea off north Australia is finally extinguished on Tuesday, and now the clean up begins

The fire that destroyed a leaking oil drilling platform that has been spewing crude oil into the Timor Sea, north of Australia, for months has finally been extinguished, PTTEP chief executive officer Anon Sirisaengtaksin said on Tuesday.

He said the blaze at the Montara well started on Nov 1.

"We finally managed to extinguish it about about 1pm Bangkok time. We are keeping everything under watch to make sure it is 100 per cent under control," Mr Anon said.

PTT Exploration and Production Plc (PTTEP) will next week send staff to examine the extent of the damage to the West Atlas platform.

He said the company will review the oil production plan at the Montara well after experts finish with their damage assessment.

Mr Anon said PTTEP has an insurance policy to cover damage of up to about US$270 million.

Energy Minister Wannarat Channukul said the damage to the oil rig was initially estimated at two billion baht.

The incident would not affect deliveries of fuel and natural gas to Thailand, he said.

The minister said the fire was caused by a technical problem, which had now been solved.

PTTEP had evacuated all staff from the rig and would take steps to get rid of the oil slick under standards fixed by the Australian government, Mr Wannarat said.

The leaking rig has been spewing up to 400 barrels of crude oil into the pristine Timor Sea each day since Aug 21, sparking an environmental uproar in Australia.

No staff had worked on the West Atlas since it began leaking