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Thailand is set to reclaim its status as the world’s top rice exporter as weak monsoon rains curb India’s crop, helping the Southeast Asian country’s new government offload excess stockpiles
With poor rains cutting Indian supply, Thai rice exports could hit 10mn tonnes this year, near a record 10.6mn tonnes sold in 2011, said Duangporn Rodphaya, director general of Thai Commerce Ministry’s Department of Foreign Trade.
Kiattisak Kallayasirivat, MD of Bangkok-based Novel Agritrading Company Limited, said, “It is a good opportunity for Thailand to manage its huge stocks at competitive prices.”
Thai rice prices flipped to a discount versus Vietnam grades for the first time in decades earlier in 2014 as the previous Yingluck Shinawatra-led government aggressively sold from stockpiles, Reuters reported.
Prices have since risen to premiums after the junta stopped sales to inspect the quality of the rice pile.
Thailand now plans to export 500,000-600,000 tonnes of rice a month from August this year. At that rate, it will take about three years to sell the 18mn tonnes built under the rice-buying scheme introduced by the Yingluck government that was ousted in May.
“Thailand will be able to fetch higher prices now that we have concerns over supplies from India and better demand,” a Singapore-based trader said. “The increase in price will reduce their losses to some extent.”
The country sold five percent broken rice from its stocks for US$360 per tonne, on a free on board (FOB) basis, earlier this year but now a similar variety of old-crop rice is being offered at around US$395 per tonne.
India had toppled Thailand two years ago to become the world’s top rice exporter as the intervention scheme priced Thai rice out of the export market and as Indian capital Delhi lifted a four-year ban on non-basmati rice sales in 2011 to trim stocks.
Indian exports have already been slowing due to aggressive sales by Thailand and Vietnam, said BV Krishna Rao, MD at Pattabhi Agro Foods Pvt Limited, a non-basmati rice exporter in India.
In Q2 2014, India had exported one million tonnes of non-basmati rice, dealers estimated, down almost 30 per cent on a year earlier. The country is offering five per cent broken rice at around US$425 per tonne FOB, up from US$410-US$415 in June 2014.
In the year ended March 31, India exported a record 10.86mn tonnes rice. Rao estimates that overseas sales will drop to eight million tonnes in 2014/15.
“Certainly Thai exporters will gain from India’s loss. The quantum depends on how monsoon pans out in next two months,” said a New Delhi-based dealer with a global trading firm.