Charoen Pokphand, the country's largest agribusiness conglomerate, says the country's rice exports this year should exceed 9 million tonnes, with the severe drought in India a major factor in pushing up demand.
"Thai rice exports are unlikely to lose their appeal even though the government's rice pledging programme, which offers relatively high prices, makes it tough for Thailand to export white rice at competitive prices," said Sumeth Laomoraphorn, chief operating officer of CP Intertrade.
"Thailand may lose the market for low-quality rice to Vietnam," he said, noting that Vietnamese 5% white rice now costs about US$380 per tonne against $530 for Thai rice. "But there is still demand for high-quality rice, for instance from Malaysia, and for parboiled rice."
Thailand exported about 5 million tonnes of rice in the first seven months of this year, with parboiled rice at 1.5 million, Thai Hom Mali 961,000 tonnes, and 20% white rice 588,000 tonnes. Shipments of 5-15% grade white rice were only 425,000 tonnes. Total rice exports for the period were worth 98.8 billion baht.
Even though the exports for the seven-month period were down from 6.8 million tonnes worth 131.29 billion baht in the same period last year, Mr Sumeth said market conditions were still normal.
He noted that rice exports last year surged because of a global panic about a rice shortage, which led several producing countries including India, Vietnam and Egypt to bar rice exports.
According to Mr Sumeth, India was highly likely to further bar non-basmati rice exports until next year due to insufficient rain.
India exported only 2.9 million tonnes of rice last year, well below normal annual levels of 5-6 million tonnes, roughly divided among basmati, parboiled and white rice.
"We are feeling upbeat that Thailand's rice shipments will surpass the target of 8.5 million tonnes set by the government by year-end. Shipments will probably as many as nine million tonnes," said Mr Sumeth.
CP Intertrade expects its rice exports to drop by 20% from a year earlier to about 400,000 tonnes, with export value of 8.5 billion baht. Local sales are forecast at 530,000 tonnes worth 12 billion baht.
Mr Sumeth warned the rice prices were expected to fall by 10-15% from now on until next year, given the government's high rice stockpiles and new output for the first crop due to be harvested in November.
The government is estimated to hold as much as 6 million tonnes of white rice currently.
First-crop paddy output is estimated at 23.5 million tonnes, up from 23.24 million in the previous season.
In a related development, the government yesterday agreed on farmers' calls to extend the price intervention scheme for paddy harvested from the 2008-09 second crop until the end of next month. The intervention scheme had been due to end on July 31.
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