Thai Rice Exports Halve In December

Thai Rice Exports Halve In December

Thailand’s December rice exports fell 50% from a year earlier to 527,348 metric tons due to uncompetitive prices after the government started procuring a substantial part of the nation’s output at above-market rates, the Thai Rice Exporters Association said.

December exports rose 12% from November but are still near their lowest level in years. Exports totaled more than 1 million tons each month in the first half of 2011.

Thailand is the world’s biggest rice exporter, shipping more than $500 million worth annually to markets worldwide, including to sub-Saharan Africa.

Thai parboiled rice exports fell 68% in December from year earlier to a mere 78,658 tons, the association said. Parboiled rice exports in December rose 30% from November but remain well below the 300,000 tons reached in most of the first nine months of 2011, the association said.

Despite the late-year slump, Thailand’s rice exports hit a record 10.6 million tons in 2011, up from 9.05 million tons in 2010. Exports began to fall in July when a new government assumed power with plans to buy rice from growers at above-market rates and the decline accelerated in September, when India resumed shipments of non-Basmati rice after more than three years, causing a major shift in trade.

India’s resumption of ordinary rice exports has hit Thai exports hard, particularly its exports of parboiled grades, said Korbsook Iamsuri, president of the exporters’ association.

The severe floods that struck Thailand in the second half of the year and the government’s procurement of nearly 25% of the crop at above-market rates have also hurt exports, Korbsook said.

The floodwaters have receded and the harvest is almost complete, bringing rice prices down since early December, but they remain almost $100/ton above prices of rice from India, Pakistan and Vietnam.

Thai exporters expect rice shipments over the next several months to remain subdued at around 500,000 tons per month because of limited availability. Many growers are holding back stocks or selling their unmilled crops to the government at a guaranteed price of THB15,000/ton, they said.