Rice exports from Thailand will probably drop further from a record amid cheaper supplies from Asian rivals and as the worst drought in almost 30 years parches crops in the world’s biggest supplier.
Thailand is poised to ship 9.5 million metric tons this year, lower than the 10 million tons forecast in February, the Thai Rice Exporters Association said in a statement on Tuesday. The country sold a record 10.97 million tons in 2014.
Cheaper shipments from Vietnam, the third-biggest exporter, spurred a unit of the U.S. Department of Agriculture to cut its forecast for Thai exports last month. The USDA’s Foreign Agricultural Service said 30 June that Thailand may export 10 million tons this year, 9 per cent less than estimated earlier. Dry weather amid a strengthening El Nino may cut the main harvest to the lowest in nine years, data from Thailand’s Office of Agricultural Economics show.
“Competition is high,” Chareon Laothamatas, president of the association, said at a media briefing in Bangkok. “Our prices are about $50 a ton above that of Vietnam.”
The price of Thai 5-percent broken white rice was quoted at $404 a ton on 15 July, compared with $385 from India and $350 from Vietnam, the association said on its website. The difference between Thai and Vietnamese prices was $30 a ton in June, compared with $20 in May, the FAS said.
El Nino, which can bake parts of Asia and disrupt harvests worldwide, has further strengthened and may persist into 2016, Australia’s Bureau of Meteorology said on its website Tuesday. Thailand’s main harvest, which accounts for about 70 per cent of annual production, may slump 14 per cent to 23.3 million tons, according to Office of Agricultural Economics data.
The inventory at the end of June totaled 15.11 million tons of which 9.15 million tons was food grade, Commerce Minister Chatchai Sarikulya said last week.
Bloomberg News, edited by ESM
