market for premium-grade grain because it is losing out to Vietnam in a
Southeast Asian price war for lower-quality white rice, a senior
official said.
Thailand aimed to produce an extra 160,000 tons of premium-grade white
rice in the current 2010-11 crop, expanding planted area by around
64,000 hectares, said Prasert Gosalvitra, director-general of the rice
department in the Agriculture Ministry.
"The 160,000 tons is a conservative figure as we will not only increase
plantations but also increase our yield as well," Mr. Prasert told
Reuters on Monday.
Thailand currently produces around seven million tons of premium
fragrant rice out of total annual production of 30 million-32 million
tons. Premium-grade fragrant rice was quoted at $900 per ton this week.
Simple white rice grades were quoted at around $435-$465 per ton,
traders said. That is down by about a quarter this year and well under
half the record high of $1,080 per ton set in April 2008.
Thailand's fragrant rice is popular, but output is limited as it can be
grown only once a year.
The 10-member Association of Southeast Asian Nations (ASEAN) implemented
a free trade deal on rice this year.
This has cut import tariffs on rice to zero, and Vietnam has seized the
opportunity to export more grain to member countries due to its
competitive prices.
The Philippines, the world's biggest rice importer, has been a big
customer. It has ordered a record 2.45 million tons of rice for this
year, of which more then 90% will come from Vietnam.
Vietnamese 5% broken grade white rice was at $360 per ton this week,
well below the same grade of Thai rice at $435 per ton, exporters said.
"We can't compete with Vietnam on white rice any more. We need to go
upmarket, where I think we can do well as Vietnam can't produce
premium-grade rice," said Chookiat Ophaswongse of the Thai Rice
Exporters Association.
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