Rice exports rocket this year on low prices

Rice exports rocket this year on low prices

Thailand's rice exports rose strongly in the first seven months this year thanks to competitive export prices with rival Vietnam and high global demand.

The country shipped out 7 million tonnes of rice during January to July this year, a 59% increase from 4.7 million the same period last year.

The average export price of Thai rice was US$565 a tonne, 4.2% lower than average prices last year but slightly higher than Vietnam rice.

The Thai Rice Exporters Association noted the discharge of over 4 million tonnes of rice in the state stockpile late last year resulted in slower price growth this year.

Indonesia, which had refrained from rice imports the past three years as part of its self-dependence scheme, resumed purchases this year after drought decimated several rice fields, said association president Korbsook Iamsuri.

Indonesia bought 628,000 tonnes of Thai rice this year and plans to import up to 1.5 million tonnes from Thailand and Vietnam by December.

Nigeria is the largest buyer this year, purchasing 940,300 tonnes of rice, up 75% against the same period last year. Next is Bangladesh, which bought 725,250 tonnes. Shipments earned the country over 90 billion baht, up by 39% year-on-year.

Robust exports should continue this month with 800,000 tonnes shipped, making the annual goal of 10 million tonnes likely, she said.

Commerce Minister Kittiratt Na-Ranong said domestic paddy prices have been climbing in response to the new rice pledging programme that plans to pay farmers 15,000 baht per tonne of paddy they mortgage with the state.

If they surpass 15,000 baht, the pledging scheme may not be necessary, he said.

"It is highly likely paddy will rise above 15,000 baht per tonne, but above 20,000 baht is not so certain," he added.

Meanwhile, Agricultural Economics Office data shows over the past two decades (1991-2010) paddy for white rice stood below 10,000 baht a tonne. The highest prices of paddy peaked at 9,848 baht a tonne in 2008 during the food crisis and were at 8,369 baht last year.