Upturn in fortunes forecast for Thai rice
With state rice stockpiles nearly sold off and major rice-producing nations suffering bad weather, Thai rice exports are likely to hit a record high this year, say government and industry officials.
Mrs Duangporn says rice exports are likely to hit a record high this year. SOMCHAI POOMLARD
Thailand's 2017 rice exports are tipped to reach 11 million tonnes, the most ever, because of rising demand in rice-importing countries at a time that production in grower countries is falling.
Duangporn Rodphaya, director-general of the Commerce Ministry's Foreign Trade Department, said several rice-importing countries have approached Thailand asking to buy more rice.
She said falling state rice stocks have ignited concerns that supply in rice-exporting countries is falling, spurring buyers to rush to secure supply.
"The decline in Thai state rice inventories has helped cut the pressure on global rice prices and also created more room for the price to rise further this year," said Mrs Duangporn.
State rice stocks rose to a historical high of 18.9 million tonnes prior to 2014 after an aggressive rice subsidy scheme, whereby the state offered to buy rice directly from farmers at higher-than-market prices.
The stocks have since fallen sharply to 2.1 million tonnes, of which 1.6 million tonnes was edible-grade white rice and 500,000 tonnes was inedible-grade rice suitable for ethanol production.
Falling government rice stocks also helped cut pressure on global prices, exporters said, adding the prices were expected to rise further over the next few months as there was fresh demand from traditional importing countries that have approached Thailand at a time of limited supply.
Charoen Laothamatas, president of the Thai Rice Exporters Association, said those countries include Iran, Iraq, Bangladesh and the Philippines.
"Some clients that used to import Thai rice but stopped buying over the past several years because of quality issues have come back," said Mr Charoen.
But Thai rice supply is limited because of the 2016 drought and the government's policy to encourage farmers to switch to other lucrative crops such as sugar, which has substantially cut supply from the off-season rice crop.
Rice production from the off-season crop dropped by more than 40% from 9-10 million tonnes on average over the past few years to just 5 million tonnes this year, according to data supplied by the Agriculture Ministry.
That has pushed the price of Thai 5% broken grade white rice to US$462 (15,684 baht) a tonne, up from last month's $416 a tonne, according to the Thai Rice Exporters Association.
"We can say that the Thai rice industry has passed through the crisis and is now on the rise," said Mr Charoen.