Tuesday, Dec 20, 2011

-- Iraq's rejection of Indian samples makes shipments of 210,000 tons rice uncertain

-- Indian and Pakistani rice is $100-$150/ton cheaper than Thailand, Uruguay

-- Results of testing of four samples are still awaited

(Adds comments on rejection, prices of the latest purchase) 


 
   By Sameer Mohindru 
   Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--Iraq's state-run grain board has rejected two more samples of Indian rice in recent weeks on quality grounds, several trading executives said separately Monday and Tuesday.

Iraq has purchased at least seven cargoes of Indian and Pakistani non-basmati white rice since end-September totaling 210,000 metric tons but shipments are uncertain due to rejection of samples before shipments. Iraq may turn to its traditional suppliers again, if Indian and Pakistani rice quality isn't suitable.

Iraq traditionally buys rice from Southeast Asia and the Americas but has turned to the Indian subcontinent for purchases due to cheaper offers. Indian rice is around $100-$150/ton cheaper than Thailand and Uruguay.

"Iraq's purchases of all seven cargoes of Indian and Pakistani rice are still only on paper, because three samples from India have been rejected while results of tests of one sample from India and three from Pakistan are still pending," an executive with a global commodities trading company said.

Traders in India confirmed the rejection of samples and said no shipments have taken place so far. Iraqi grain board officials couldn't be immediately reached for comment.

A sample of New Delhi-based Amira Foods (India) Ltd. was rejected last month. Subsequently, two more samples submitted by transnational trading companies were rejected due to taste of rice after cooking, traders said.

If Indian rice is found unsuitable, Iraq may consider Vietnamese origin as prices have fallen in recent weeks and because Thai rice is more expensive than most origins, Chookiat Ophaswongse, a honorary president of Thai Rice Exporters' Association, said.

Vietnamese exporters have scaled down prices for 5% broken white rice to around $480/ton, free on board, down from $550/ton in early December to be more competitive. Offers from India and Pakistan are $440-$460/ton, FOB.

In the latest purchase, Iraq bought 90,000 tons of Pakistani rice and 30,000 tons of Indian origin, for shipment by Jan. 15, from Hamburg-based Alfred C. Toepfer International GmbH, Switzerland-based Ameropa and Cyprus-based Midgulf International.

Iraq bought Indian rice around $503.89/ton, basis cost and freight and Pakistani rice between $536 and $540, C&F. The samples are being tested and the purchase is subject to test results.

Unlike most global sales where raw rice quality is tested, Iraq is making a post-cooking assessment of the grain, where parameters such as taste can be subjective.

-By Sameer Mohindru, Dow Jones Newswires; +(65) 6415-4085; sameer.mohindru@dowjones.com

(END) Dow Jones Newswires

20-12-11 1119GMT