Officials see declining 2019 rice shipments
India's rise, expected drought temper view
The government is confident that Thailand will end the year exporting 11 million tonnes of rice as targeted, but shipments are forecast to drop to 10 million tonnes next year amid stiff competition and a domestic drought.
Boonyarit Kalayanamit, the commerce permanent secretary, said the National Rice Policy Committee chaired by Prime Minister Prayut Chan-o-cha met on Thursday and endorsed the figures.
As of Dec 11, Thai rice exports ranked second globally at 10.35 million tonnes, following India's 11.37 million. Vietnam was third with 6.06 million tonnes.
"This year, Thai rice shipments were driven by high demand from the Philippines and Indonesia," Mr Boonyarit said.
The Commerce Ministry is in the process of delivering 100,000 tonnes of rice to China and 80,000 tonnes to the Philippines under government-to-government deals, he said.
The private sector is also shipping 144,000 tonnes to the Philippines.
Charoen Laothammatas, president of the Thai Rice Exporters Association, said the global rice market is likely to see stiff competition in the year to come. He cited the Indian government's recently announced incentives for non-basmati rice shipments.
India will give a subsidy of 5% for non-basmati rice exports for the four months to March 25, 2019.
Mr Charoen said the rupee's weakness has given a boost to Indian rice shipments and made them more competitive than shipments from Thailand, where the baht is quite strong.
More importantly, he said, the Philippines, Indonesia and China are expected to delay their rice imports from Thailand in 2019 after importing a relatively large volume from Thailand this year.
"The private sector is trying to find a strategy to increase rice exports, especially for new varieties to serve niche markets," Mr Charoen said.
He said the current government's policies initiated and launched over the last four years have helped reduce farmers' production costs by 15-20%.
Mr Boonyarit said global rice production in the 2018-19 crop year is estimated at 49.1 million tonnes, down 3.93 million tonnes from the 2017-18 crop because of drought in southern and northern China, low rainfall in India and natural disasters in the Philippines.
Global consumption in 2019 is projected at 490 million tonnes, up 6.47 million tonnes from 2018, mainly on higher consumption in China, India and Nigeria.
Global rice trade in 2019 is estimated at 48.31 million tonnes, up 0.10 million tonnes from 2018 because of higher rice production in the US and Vietnam. The two countries are also expected to raise their exports in the year ahead.
The global rice stockpile in late 2019 is projected at 163.3 million tonnes, up 1.57 million tonnes from late 2018.
In related news, Mr Boonyarit said the committee approved a rice insurance scheme for the 2019 crop with a total budget of 1.74 billion baht covering 30 million rai.
Farmers are required to pay 34 baht worth of insurance premium per rai, while the government will subsidise 51 baht per rai. The Bank for Agriculture and Agricultural Cooperatives will subsidise 34 baht per rai, but only for its clients.