Rice prices expected to hold steady
Strong overseas demand for Thai rice is expected to support prices even as an influx of around 25 million tonnes of the 2017/18 major crop is about to flood the market next month, say industry officials.
Thai Rice Exporters Association president Charoen Laothammatas said hefty demand from the overseas markets could push 2017 rice exports to 10.8 million tonnes, nearly matching the record high of 10.9 million tonnes in 2014.
"Exports could even hit 11 million tonnes this year if we can ship an average of 900,000 tonnes during the last three months of the year," said Mr Charoen.
He said Thailand exported 8.2 million tonnes so far this year, an average of 820,000 tonnes a month, bringing the target within reach.
Strong demand is expected to last until the end of the year, preventing the price from falling significantly after the harvest at the end of the year.
Apart from the major crop, another 7-8 million tonnes of paddy is estimated to come from the second crop, mostly from well-irrigated areas in the central region, bringing the total to 32 million tonnes for the 2017/18 crop.
"Excessive rainfall and flooding could damage some crops in the low-lying areas in the central region, but good irrigation in the areas also allows the farmers to grow crops off-season," said Mr Charoen.
In contrast, excessive water helps boost the production of premium grade white rice, known as hom mali, grown mostly in plateaus areas in the northeastern region, he added.
However, abundant rice crops are unlikely to cause any price slumps this year as demand for Thai rice from several countries, particularly in Asia, is expected to keep prices relatively high despite rising output during the harvest.
The price of premium grade hom mali rice is US$750-$800 a tonne, compared with the average price of $781 a tonne last year.
The price of common grade 5% white rice was at $375-$400 a tonne, compared with the average price of $394 a tonne last year.
"The price is expected to remain firm until the end of the year, support by strong demand," he said. Bangladesh is asking to buy around 150,000 tonnes and Sri Lanka wants to buy 25,000 tonnes of rice from Thailand, said Mr Charoen.
Commerce Minister Apiradi Tantraporn said the ministry has no plans to release any rice from the state stockpiles during the year-end harvest to avoid hurting local rice prices.
The local paddy price stands at 7,500-8,000 baht a tonne, slightly higher than 6,000 baht last year, said Mr Charoen.