Rice exports 'should still hit 10m tonnes'

Although rice prices have retreated as foreign buyers delay orders and global production recovers, Thailand is still bullish on its own export prospects this year.

"Rice exports should reach 10 million tonnes this year, as demand is still rising in rice consuming countries. However, exports in the second half will not surge sharply like in the first half," Chookiat Ophaswongse, president of the Rice Exporters Association, said yesterday.

Exports should increase next month, as orders from major importers will revive due to high demand, he said.

The export price dropped by US$20 to $30 (Bt670-Bt1,000) per tonne in the week to Wednesday, as foreign buyers waited to see if more rice would enter the world market.

Export prices from Thailand, the world's biggest exporter, may drop 10 per cent through August 2009 as global production rises, said Sunny Verghese, CEO of Olam International.

"We will get increased production this year," Verghese said in an interview in Singapore. "As harvests come up, you see the restrictions the governments have placed begin to be rolled back, so those export bans will begin to ease."

The export price of 100-per-cent grade-B white Thai rice, used as a benchmark, rose to a record $1,038 a tonne on May 21, as exporters including Vietnam, India and China curbed shipments to dampen domestic prices.

As of last Wednesday, the price of jasmine rice had fallen from $1,085 per tonne to $1,057 in only a week. Regular white rice fell from $862 to $849, and sticky rice dropped from $681 to $650 in the same period.

Iran, Indonesia and Nigeria - three major rice importers - delayed taking deliveries from Thailand in the first half of the year, Chookiat said. They are expected to place orders this half, which would ensure that the Kingdom's export volume will exceed the target of 9.5 million tonnes.

Normally, those three importing countries demand 500,000 to 1 million tonnes of rice from Thailand each year.

According to the association, Thai rice exports increased 46.7 per cent to 5.97 million tonnes in the first half. Last month alone, exports grew 29.6 per cent to 945,685 tonnes.

The association forecasts rice exports of 500,000-700,000 tonnes in each remaining month of the year.

Rice prices have dropped in the past few weeks and are likely to decline for the next few months as importers already have full stocks, Chookiat said.

Major importing countries in Africa and the Middle East are waiting for prices to sink further, as Vietnam, the world's third-largest exporter, has declared it would supply more rice to the global market.

Orders dropped by 20 per cent last month, but buyers will be back next month, when Vietnam comes fully back to playing in the market, Chookiat said.

Vietnam exported about 2.5 million tonnes of rice by May and is on track to meeting its export target of 4.5 million-5 million tonnes for the year.