Thailand to reclaim top rice exporter spot after poor Indian rains

MUMBAI/BANGKOK Mon Jul 21, 2014 8:35am IST

Labourers plant saplings in a paddy field on the outskirts of Bhubaneswar July 19, 2014. REUTERS/Stringer

Labourers plant saplings in a paddy field on the outskirts of Bhubaneswar July 19, 2014.

Credit: Reuters/Stringer

Related Topics

MUMBAI/BANGKOK (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 tonnes of rice a month from August. At that rate, it will take about three years to sell the 18 million 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 5 percent broken rice from its stocks for $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 $395 per tonne.

This, however, is still short of the estimated cost of 22,000 baht ($680) per tonne 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 tonnes this year, near a record 10.6 million tonnes 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 percent 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 tonnes of non-basmati rice, dealers estimated, down almost 30 percent on a year earlier. The country is offering 5 percent broken rice at around $425 per tonne 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 tonnes rice. Rao from Pattabhi Agro estimates overseas sales will drop to 8 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.

($1 = 32.1700 Thai Baht)

(Additional reporting by Naveen Thukral in SINGAPORE; Editing by Himani Sarkar)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Pollution Levels

Pollution Levels

Delhi braces for worst air quality this Diwali week.  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage