Thailand is set to reclaim its status as the world’s top rice exporter as weak monsoon rains curb India’s crop, helping the Southeast Asian country’s new military government offload bulging stockpiles.
Fewer Indian exports would allow Bangkok to win better prices for the grain that it has been selling at a huge discount, curbing losses on the stocks built up under a costly state intervention scheme. “It is a good opportunity for Thailand to manage its huge stocks at competitive prices,” said Kiattisak Kallayasirivat, managing-director of Bangkok-based Novel Agritrading Co Ltd.
Thai rice prices flipped to a discount versus Vietnam grades for the first time in decades earlier this year as the previous Yingluck Shinawatra-led government aggressively sold from stockpiles. Prices have since risen to par or premiums after the junta stopped sales to inspect the quality of the rice pile.
Thailand plans to export 500,000-600,000 tonnes of rice a month from August. At that rate, it will take about three years to sell the 18 million tonnes built under the rice-buying scheme introduced by the Yingluck government that was ousted in May. “Thailand will be able to fetch higher prices now that we have concerns over supplies from India and better demand,” a Singapore-based trader said.
“The increase in price will reduce their losses to some extent.” The country sold 5 percent broken rice from its stocks for USD 360 per tonne, on a free on board (FOB) basis, earlier this year but now a similar variety of old-crop rice is being offered at around USD 395 per tonne. This, however, is still short of the estimated cost of 22,000 baht (USD 680) per tonne that the ousted government incurred on buying paddy from farmers, milling and storage.