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Labourers plant saplings in a paddy field on the outskirts on the eastern Indian city of Bhubaneswar, in this file picture taken July 19, 2014. 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 military government offload bulging stockpiles. REUTERS
Reuters: 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 military government offload bulging stockpiles.
Fewer Indian exports would allow Bangkok to win better prices for the grain that it has been selling at a huge discount, curbing losses on the stocks built up under a costly state intervention scheme.
“It is a good opportunity for Thailand to manage its huge stocks at competitive prices,” said Kiattisak Kallayasirivat, managing-director of Bangkok-based Novel Agritrading Co Ltd.
Thai rice prices flipped to a discount versus Vietnam grades for the first time in decades earlier this year as the previous Yingluck Shinawatra-led government aggressively sold from stockpiles. Prices have since risen to par or premiums after the junta stopped sales to inspect the quality of the rice pile.Thailand plans to export 500,000-600,000 tons of rice a month from August. At that rate, it will take about three years to sell the 18 million tons 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 5% broken rice from its stocks for $360 per ton, on a free on board (FOB) basis, earlier this year but now a similar variety of old-crop rice is being offered at around $395 per ton.
This, however, is still short of the estimated cost of 22,000 baht ($680) per ton that the ousted government incurred on buying paddy from farmers, milling and storage.
With poor rains cutting Indian supply, Thai rice exports could hit 10 million tons this year, near a record 10.6 million tons sold in 2011, said Duangporn Rodphaya, director general of Thai Commerce Ministry’s Department of Foreign Trade. India 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 Delhi lifted a four-year ban on non-basmati rice sales in 2011 to trim stocks.
But India’s output could be hit this year as rains, crucial for the summer-sown rice crop, were 40% below average in the first six weeks of the June-September monsoon season.
Indian exports have already been slowing due to aggressive sales by Thailand and Vietnam, said B.V. Krishna Rao, managing director at Pattabhi Agro Foods Pvt Ltd, a leading non-basmati rice exporter in India.
In the June quarter, India exported 1 million tons of non-basmati rice, dealers estimated, down almost 30% on a year earlier. The country is offering 5% broken rice at around $425 per ton FOB, up from $410-$415 last month.
Indian farmers had planted paddy on 8.64 million hectares as on July 11, compared to 11 million hectares a year ago.
In the year ended March 31, India exported a record 10.86 million tons rice. Rao from Pattabhi Agro estimates overseas sales will drop to 8 million tons 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. ($1 = 32.1700 Thai Baht)
