Thailand to pass India as #1 Rice shipper
Thailand is set to overtake India as the world’s largest rice exporter as the nation accelerates sales from state stockpiles, adding to record global supplies, according to the International Rice Research Institute.
Shipments from India may drop to as low as 7-M metric tons in the year that began 1 October, said Samarendu Mohanty, a senior economist.
Exports including the aromatic basmati variety more than tripled to 10.4-M tons the prior year, said the US Department of Agriculture.
Thailand plans to ship 8.5-M tons in Y 2013 from 7.3-M tons this year, according to the Department of Foreign Trade.
Rising Thai supplies may increase competition among Asian producers and pressure prices that have risen 1.2% in Chicago this year. A decline in the staple for half the world may further lower food costs that the United Nations’ Food & Agriculture Organization estimates dropped 0.9% in October from a 6-month high. Global opening stockpiles for MY 2012-2013 will climb to the highest in a decade, the USDA says.
“Thailand has little choice but to release stocks and that will probably lead to lower prices,” Concepcion Calpe, a senior economist at the FAO, said from Rome. “There will be growing competition from less important rice-supplying countries, such as Brazil, Russia, Egypt and Australia in the export markets, which will tend to reduce prices in Y 2013.”
Thailand’s stockpiles are set to climb to a record 12.1-M tons by the end of MY 2012-2013 from 9.8-M tons a year earlier, the USDA estimates. The country will be forced to sell some of the rice it bought from farmers to make space for the new harvest, said Mr. Mohanty.
Prime Minister Yingluck Shinawatra implemented a price- support policy to boost incomes of farmers who helped her Pheu Thai party win an election last year. The government guaranteed as much as 15,000 baht ($489) a ton for unmilled white rice, about 50% more than local market rates, and 20,000 baht for a higher-quality variety.
India is set to export 7.25-M tons in MY 2012-2013 and Thailand will ship 8-M tons, USDA data show. Vietnam may sell 7-M tons, becoming the 3rd biggest shipper.
The free-on-board price of 25% broken long-grain white rice in Thailand costs as much as $540 a ton compared with $385 in India, said Vijay Setia, former president of the All India Rice Exporters’ Association. Most Indian rice exports are the 25% broken variety, he said.
January-delivery contract rose 0.8% to $15.045 per 100 lbs at 9:25 a.m. Mumbai time on the Chicago Board of Trade. Prices climbed to a 3 yr high of $18.37 in September last year.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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