Thailand set to reclaim top spot in rice sales
Rice shipments from Thailand are poised to surge 15 per cent this year to help the country win back the top-exporter slot.
- Published: 31/01/2013 at 12:35 AM
- Newspaper section: topstories
Government sales are accelerating from its record stockpiles, an industry group said Wednesday.
Exports may climb to 8 million metric tonnes this calendar year, assuming sales of 1.5 million tonnes from state inventories, from 6.95 million tonnes in 2012, said the Thai Rice Exporters Association (TREA).
Last year, India and Vietnam sold more than Thailand as shipments tumbled 35 per cent to the lowest level since 2000, according to the US Department of Agriculture's figures.
Rice, the staple for half the world, has dropped 16 per cent from a three-year high in September 2011 as inventories tracked by the United Nations' Food & Agriculture Organisation (FAO) swell to a record, curbing food costs. Thailand started buying rough (paddy) rice from farmers above market rates in October, 2011, to lift domestic prices and rural incomes.
"The 8-million-ton target will be achieved as the government has to speed up government-to-government sales," the TREA's president Korbsook Iamsuri, told the media. Thailand has around 17 million tonnes of milled rice in stockpiles, the group estimates.
The government has bought 9 million tonnes of unmilled rice and expects to purchase as much as 11 million tonnes during the current harvest, Commerce Minister Boonsong Teriyapirom said Jan 23. The country will maintain an export target of 8.5 million tonnes for this year, according to the Department of Foreign Trade.
"Thailand will be more aggressive in terms of exporting the rice," Samarendu Mohanty, a senior economist at the International Rice Research Institute, said in an email dated Wednesday. "It has no other choice."
The strength of Thailand's currency against the dollar, reducing the appeal of shipments from the country, may hamper rice sales, Mr Korbsook said. The Thai baht has gained 2.7 per cent this month, the second-best exchange-rate performance in Asia after the Indian rupee.
"A sharp rise in baht in recent weeks has made buyers hesitant to place orders as the price in dollar terms has increased," Mr Korbsook said. "This is a key obstacle in addition to the state purchase program, which has raised costs."
Stockpiles in Thailand will climb to a record 11.7 million tonnes in the 2012-2013 season, according to the USDA, which estimates Thai exports will be 8 million tonnes, followed by India at 7.5 million tonnes and Vietnam at 7.4 million tonnes.
World output of milled rice in 2012-2013 is forecast at an all-time high of 465.6 million tonnes, according to the USDA. The FAO has forecast global reserves climbing to 169.8 million tonnes by the end of 2012-2013.
Rice for March delivery was unchanged at $15.525 per 100 pounds on the Chicago Board of Trade Wednesday afternoon Thailand time. Price of 5 per cent Thai white variety was at $599 a ton, compared with $430 from India and $390 from Vietnam, data from the exporters' association showed.
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- Writer: Bloomberg