Rice exports from Thailand may be steady next year as the world’s biggest shipper taps state inventories to offset a possible decline in production amid dry weather.
Shipments may be close to 10 million tonnes, matching the government target for 2015, Commerce Minister Apiradi Tantraporn said in an interview on Oct 2. The country plans to sell all of its 13 million tonnes in state reserves by the end of next year, most of which are of food-grade quality, she added.
Thailand accounts for about a quarter of the global rice trade and is maintaining sales even as water shortages across the country’s central plain are poised to reduce harvests to the lowest in almost two decades. World output will drop for the first time since 2009-10, while demand expands for a sixth year, according to the US Department of Agriculture. Futures in Chicago rose to a 14-month high last month.
“Next year, we may not have abundant crop like this year,” said Ms Apiradi. That should not cause a problem as the government will release grain from the stockpiles and there is a new crop coming on to the market, she added.
Output of rough rice may decline to as low as 22.98 million tonnes in 2015-16, the least since 1996-97, assuming there is no planting during the dry season starting in November, Thailand’s Office of Agricultural Economics said in September. That’s down 30% from 32.62 million tonnes a year earlier.
Water Reserves
Water reserves in the Chao Phraya basin are at inadequate levels for planting crops, especially for rice from November to June, the Office of Agricultural Economics said on Sept 25. Authorities have urged farmers to cut rice planting.
While the government is unlikely to provide direct subsidies to farmers, it would work on ways to reduce their production costs, said Ms Apiradi.
The country may export 10.2 million tonnes in 2015-16, up 13% from a year earlier, the USDA said in a report in September. Production may fall 4% to 18 million tonnes. World output will drop to 475.8 million tonnes from 478.6 million in 2014-15, USDA data show.
Rough-rice futures for November rose 0.2% to US$13.27 per 100 pounds on the Chicago Board of Trade at 8:49 am in Bangkok, up 13% this year. The commodity touched $13.39 on Sept 29, the highest since July 2014.
Prices of Thai 5% broken white rice, a benchmark in Asia, have declined 16% this year to $350 a ton on Sept 30, the lowest since December 2007, according to the Thai Rice Exporters Association.