Thai Rice Exporters Association has raised its export forecast to 11 million tonnes this year, citing continuously robust purchase demand, the weakening baht and natural disasters that will dampen rice supply.
The association's president, Pol Lt Charoen Laothammatas, said yesterday that the association is now confident that rice shipments will exceed the 9.5 million tonnes worth US$4.3 billion (142.8 billion baht) predicted in January, likely reaching 11 million tonnes worth $5.6 billion.
"Purchase demand from rice buyers such as the Philippines, Indonesia, Malaysia, Japan and Africa remains strong and unabated, as they are trying to boost their domestic stocks to offset lower production at home," Mr Charoen said. "The baht is currently trading at 33 baht per US dollar, from an average of 31 baht at the beginning of the year, making prices more competitive in the world market."
According to Mr Charoen, China is expected to soon clinch a deal to buy an additional 1 million tonnes of rice this year as part of an investment package that includes the initial high-speed rail project and sales of 2 million tonnes of rice and 200,000 tonnes of rubber agreed earlier.
Thai officials and their Chinese counterparts signed a memorandum of understanding in December 2014 for 1 million tonnes each of old and new grains, along with the 200,000 tonnes of rubber.
Thailand has already signed a 1-million-tonne contract for delivery this year.
Chookiat Ophaswongse, honorary president of Thai Rice Exporters Association, said Indonesia is also expected to buy an additional 1 million-2 million tonnes, while the Philippines will import an additional 500,000 tonnes this year.
"We also expect strong demand to also come from African countries and China," Mr Chookiat said. "Ongoing flooding in several areas in the country has yet to deliver any direct impact to annual rice production and prices, since those flooded areas are not the main rice farmland."
That said, Mr Charoen added that there are several issues that need to be addressed -- namely the low levels of government rice stockpiles.
The government currently has just 70,000 tonnes of rice stocks, all of it inedible. Of the total, 20,000 tonnes will be sold for animal feed while the remaining 50,000 tonnes is earmarked for biofuel production.
The government is scheduled to auction off the remaining state rice stocks some time this month, which could drive up rice prices in the domestic market.
While exports are expected to exceed previous forecasts, Mr Charoen said, weather conditions across Thailand may cause a drop in production output -- with the association predicting that the production of the hom mali fragrant jasmine variety will drop by 40% this year because of logistical problems caused by flooding.
Mr Charoen said Thailand lacks stockpiles of softer white rice, which has higher demand and fetches higher prices in the global market.
Thailand exports about 9-10 million tonnes of milled rice a year, with white rice making up the bulk of the exports with 5 million tonnes exported each year, followed by hom mali rice at 2 million tonnes, parboiled rice at 2 million tonnes and other grains making up the rest.