The country's rice prospects are brightening, with exports expected to stay strong at 9.5 to 10 million tonnes next year, says the Thai Rice Exporters Association.
Thailand's rice situation is stable thanks to several pending purchase orders under government-to-government (G-to-G) contracts with the Philippines and China, president Charoen Laothammatas said yesterday.
He expects Thai paddy prices will remain steady at 8,000 to 8,500 baht a tonne next year.
The government is hoping to sell more rice from its stocks in the year to come due to lower output resulting from drought conditions.
Drought is forecast to cut second-crop output next year by 50% to 4-5 million tonnes of paddy from 8-10 million tonnes.
The government through the Foreign Trade Department will sign a G-to-G deal this week to sell 500,000 tonnes of newly harvested rice worth 8 billion baht to Indonesia's rice-buying agency, Bulog.
Of the 500,000 tonnes, 15% white rice will make up 450,000 tonnes, with 5% white rice making up the rest. Delivery is scheduled from this month to next March.
Since Prime Minister Prayut Chan-o-cha took office, Thailand has sold more than 2 million tonnes under G-to-G contracts, 1 million of which is to be delivered this year.
In September, the government secured a deal to sell 300,000 tonnes of rice to the Philippines' National Food Authority under a G-to-G deal at cost, insurance and freight prices of US$426.60 a tonne. Delivery is due between now and next January.
The government is also set to sign a deal to sell 1 million tonnes of rice to China, with delivery scheduled for next year.
The grains, mainly new 5% white rice and Hom Mali rice, are part of a 2-million-tonne lot for which Thailand and China signed a memorandum of understanding last December.
The contract will be made through the China National Cereals, Oils and Foodstuffs Corporation, the giant state enterprise that oversees rice imports, as a way of ensuring transparency.
The transaction with China is unrelated to an earlier deal for 1 million tonnes struck by the Yingluck Shinawatra government. Thailand has already delivered 700,000 tonnes as part of that deal.
Commerce Minister Apiradi Tantraporn last week said drought conditions prompted many countries to go on a rice-buying spree, with the Philippines and Indonesia expected to buy more rice.
The scenario presents a good opportunity for Thai rice exports and rice prices, she said, adding that authorities also expected to sell more rice to Iran, Singapore and Hong Kong.
In a bid to stabilise domestic prices ahead of the main crop's new release of supply this month and next, the rice policy and management committee recently agreed to delay sales of high-quality rice from state stocks.
The panel will allow the sale of 2 million tonnes of low-quality rice, mainly for industrial use.