Thailand to pass India as top rice shipper
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- Published: 27/11/2012 at 11:09 AM
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Thailand is set to overtake India as the world's largest rice exporter as the country accelerates sales from state stockpiles, adding to record global supplies, according to the International Rice Research Institute.
Shipments from India may drop to as low as seven million metric tonnes in the year that began Oct 1, said Samarendu Mohanty, a senior economist. Exports including the aromatic basmati variety more than tripled to 10.4 million tonnes the previous year, said the United States Department of Agriculture (USDA). Thailand plans to ship 8.5 million tonnes in 2013 from 7.3 million tonnes this year, according to the Department of Foreign Trade.
Rising Thai supplies may increase competition among Asian producers and pressure prices that have risen 1.2% in Chicago this year. A decline in the staple for half the world may further lower food costs that the Food and Agriculture Organisation (FAO) estimates dropped 0.9% in October from a six-month high. Global opening stockpiles for 2012 to 2013 will climb to the highest in a decade, the USDA says.
"Thailand has little choice but to release stocks and that will probably lead to lower prices," Concepcion Calpe, a senior economist at the FAO, said from Rome. "There will be growing competition from less important rice-supplying countries, such as Brazil, Russia, Egypt and Australia in the export markets, which will tend to reduce prices in 2013."
Thailand's stockpiles are poised to climb to a record 12.1 million tonnes by the end of 2012-2013 from 9.8 million tonnes a year earlier, the USDA estimates. The country will be forced to sell some of the rice it bought from farmers to make space for the new harvest, Mr Mohanty said.
"High stockpiles may force Thailand to sell rice at a cheaper rate in the global market," Mr Mohanty said. "The world market is already flooded with rice and if Thailand sells below cost, that will weaken prices further."
Prime Minister Yingluck Shinawatra implemented a price- support policy to boost incomes of farmers who helped her Pheu Thai party win an election last year. The government guaranteed as much as 15,000 baht (US$489) a tonne for unmilled white rice, about 50% more than local market rates, and 20,000 baht for a higher-quality variety.
India is set to export 7.25 million tonnes in 2012 to 2013 and Thailand will ship eight million tonnes, USDA data show. Vietnam may sell seven million tonnes, becoming the third-biggest shipper.
The free-on-board price of 25% broken long-grain white rice in Thailand costs as much as $540 a tonne compared with $385 in India, said Vijay Setia, former president of the All India Rice Exporters' Association. Most Indian rice exports are the 25% broken variety, he said.
Futures traded at $15.050 per 100 pounds on the Chicago Board of Trade on Monday. Prices climbed to a three-year high of $18.37 in September last year.
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- Writer: Bloomberg News
Position: News agency