Thai rice exports plunge, India to sell more grain
Posted by Labels: Export, Grain, India, Rice, ThailandThai rice exports slumped by more than half in January from a year earlier, which traders blamed on a government intervention scheme, while India continued to sell more grain after its government eased export curbs.
Thailand, the world's biggest rice exporter, sold just 350,000 tonnes of rice in January, down 52 percent from a year earlier, when it exported 730,000 tonnes, Commerce Ministry data show."The sharp fall in January is clear evidence that our prices are uncompetitive, and exports will continue to fall," one trader said.
Thailand's benchmark 100 percent B grade white rice was steady at $550 per tonne on Wednesday, propped up by the government's buying as demand remained thin.
The government started buying rice at 15,000 baht ($490) per tonne on October 7 to honour an election promise.
That was double the market price in the middle of last year, before the July election.
The scheme is due to end on February 29, when the main crop will have been harvested, but newly appointed Commerce Minister Boonsong Teriyapirom has said he would seek cabinet approval to extend it to cover the second crop at the same price.
Around 7 million to 10 million tonnes of rice is expected in this crop.
Harvesting is due to start in early March.
Boonsong said there would be no change in the rice intervention policy, but the government would buy more aggressively to push prices much higher to support farmers.
Some farmers are still having to sell to millers or middlemen at prices of around 9,000 baht a tonne, as many do not have trucks to carry grain to government buyers.
The buying process was also disrupted during last year's severe floods and many farmers sold cheaply to get cash quickly.
As a result, the export price, although high, has not gone anywhere near the $800 or more forecast by some exporters when the intervention scheme was unveiled.
VIETNAM UNCOMPETITIVE TOO Vietnamese rice exports are also suffering because of uncompetitive prices, traders said.
Exports in the first quarter are expected to fall 39 percent from a year ago to around 1.1 million tonnes in the face of competition from India and other Asian countries, state media have said, quoting food officials.
"Although Vietnamese rice prices are lower than Thai prices, they are still uncompetitive compared to Indian rice," said a Bangkok-based trader.
Indicative offer prices for Vietnam's 5 percent broken rice stood at $440 to $450 a tonne, free on board (FOB), against $455 last Wednesday.
The 25 percent broken rice ranged from $410 to $425 a tonne, versus $420 two weeks ago.
Trading in Vietnam was slow this week, with few transactions after a one-week close for the Tet holiday.
In contrast, business in India was brisk, with trading houses securing deals with Indian suppliers, mostly for delivery to Africa, traders said.
Indian white rice remained at $455-$465 per tonne FOB, unchanged from last week.
One Delhi-based trader reported inquiries from Nigeria, South Africa and Bangladesh.
Indian ministers will meet next week to review the rice policy.
The country initially said it would allow exports of 2 million tonnes from last September, but that cap has since been removed.
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