High prices, strong baht cause rice export drop

High prices, strong baht cause rice export drop

Thai rice exports declined in both volume and value in February, with blame falling on high prices relative to competitors, notably Vietnam, as well as the strong baht.

Charoen Laothammatas, president of the Thai Rice Exporters Association, said on Friday that outbound rice shipments totalled 687,560 tonnes in February, down 27.7% from the same month of last year, with exports worth 11.69 billion baht, down 23.5% year-on-year.

"Shipments of all grains fell from January," Mr Charoen said. "White rice, in particular, saw shipments drop by 40.7% from January to 326,029 tonnes, with shipments of parboiled rice falling 13.8% to 194,902 tonnes."

Exports of Thai premium hom mali jasmine rice fell by 6.2% in February from a month earlier to 99,147 tonnes.

According to Mr Charoen, Vietnam's rice prices were US$40-50 a tonne lower than Thai grains and lured buyers from the Philippines and Malaysia.

As of March 27, white rice 5% was quoted at $411 a tonne, while similar grains from Vietnam were at $358-362 per tonne and those from India and Pakistan were $373-377 and $350-354 per tonne, respectively.

Mr Charoen said that despite the export fall in February, rice exporters still believe shipments will recover in March to 700,000-800,000 tonnes. Thai exporters still maintain huge outstanding purchase orders for white rice and parboiled rice from key African and Asian buyers such as Benin, South Africa, Cameroon, China and the Philippines, which are due to take delivery in March.

More importantly, import demand for hom mali rice from potential buyers like the US and Canada remains strong.

"We, rice exporters, are still maintaining our forecast for the country's rice export target at 9.5 million tonnes this year," Mr Charoen said. "How this year's situation will play out will depend on the drought."

Thai rice shipments totalled 11.09 million tonnes last year, down 5% from 11.67 million in 2017 but higher than 9.91 million in 2016.

Export value rose 8.3% last year to $5.61 billion from $5.18 billion in 2017 and $4.40 billion in 2016. Rice export prices averaged $507 per metric tonne last year, up 14.1% from 2017.

White rice made up 5.49 million tonnes (up 17.4% year-on-year), including parboiled rice at 2.71 million tonnes (down 19.9%), hom mali fragrant rice at 1.27 million tonnes (down 22.1%), white broken rice at 390,000 tonnes (down 0.7%), hom mali broken rice at 380,000 tonnes (down 43.2%), general fragrant rice at 260,000 tonnes (up 18.6%), broken glutinous rice at 200,000 tonnes (down 32.3%) and glutinous rice at 180,000 tonnes (down 15.7%).

The association forecasts Thailand to ship 4.8 million tonnes of white rice this year, including 2.4 million tonnes of parboiled rice, 1.3 million tonnes of hom mali fragrant rice, 600,000 tonnes of general fragrant rice and 400,000 tonnes of glutinous rice.

In a related development, yesterday's national rice policy committee meeting chaired by Prime Minister Prayut Chan-o-cha ordered responsible agencies to dispose of the remaining 200,000 tonnes in state stocks in May this year.

Most of the state stocks that remain unsold are the grains that are either not accepted by the Corrections Department or rejected by the winning bidders.

Deputy Prime Minister Chatchai Sarikulya said Gen Prayut also ordered related agencies to speed up lawsuits related to the Yingluck Shinawatra government's failed rice-pledging scheme.

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