Rice exports could slip

Rice exports could slip

Thai rice exports are expected to drop by 3.8% in volume this year, with export prices likely to stay relatively low because of higher global supply and stiffer competition.

The Thai Rice Exporters Association said shipments should reach 9.5 million tonnes this year, fetching US$4.3 billion or about 150 billion baht.

Of the total export volume, 4.6 million tonnes is forecast to be white rice, 2.4 million tonnes hom mali rice, 2 million tonnes parboiled rice, and the rest glutinous and broken rice.

The decline will mainly affect white rice exports, which are expected to fall by 310,000 tonnes from 4.91 million tonnes in 2016, and parboiled rice shipments, which are expected to drop by 140,000 tonnes from 2.14 million tonnes last year.

Sales of premium hom mali rice are expected to climb 1.7% this year from 2.36 million tonnes last year.

Last year Thailand shipped 9.88 million tonnes of milled rice, up by 0.9% from a year before, valued at $4.4 billion. Thailand trailed only India, which exported 10.43 million tonnes last year, while Vietnam shipped 4.95 million tonnes.

Charoen Laothamatas, president of the association, said the dip was attributable to higher rice production, citing the US Agriculture Department's forecast that global rice production will rise by 1.6% this year to 480 million tonnes, while consumption is estimated at 477.8 million tonnes.

Prices may be pressured in the short term by the Thai government's plan to sell its entire 8 million tonnes of state rice stockpiles this year, he said.

Prime Minister Prayut Chan-o-cha said last month the government wants to dispose of its existing rice stocks in 2017. Most of the existing 8 million tonnes are white rice, 5 million tonnes of which is poor-quality grain unfit for human consumption.

The remaining 2.87 million tonnes is mixed grade in quality, suitable for human consumption.

The Commerce Ministry is in talks with the Energy and Industry ministries to find industrial purposes for the inedible stocks, such as biomass and ethanol production.

The Foreign Trade Department yesterday announced a call for a general auction for the remaining 2.87 million tonnes fit for human consumption. The stocks are kept in 274 state warehouses in 17 provinces. Interested bidders will be allowed to observe the rice stocks from Feb 6-10.

Qualified bidders are scheduled to submit their bids on Feb 16, while names of the winners will be announced on the same day.

Mr Charoen said exporters are concerned about baht appreciation, which may cripple Thailand's competitiveness.

"Stiffer competition in the global rice market is anticipated this year, particularly from India's existing massive rice stocks and higher production from India and Vietnam," he said. "What exporters need now is government control measures on Thai rice production as well as assistance to cut logistics costs."

The association projected Thai rice production in the 2016/17 season will total 32 million tonnes of paddy, about 26 million tonnes of which from the main crop and 6 million from the second crop.

Chookiat Ophaswongse, honorary president of the association, said Thai rice export prices are expected to average $430 per tonne this year, slightly lower from $445 last year.

He said increasing demand may be offset by higher supply from India and Vietnam.

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