Thai rice prices rise with new export orders

According to the Rice Exporters Association, the five per cent regular rice price jumped by Bt4,000 per tonne to Bt27,000 a tonne in two days. Paddy jasmine rice remains high at Bt35,000 per tonne.

The Malaysian government

yesterday agreed to close a deal with the association for Thai exporters to ship 200,000 tonnes of rice next month. For half of the stocks, Thai exporters agreed on a price of US$950 (Bt30.400) a tonne for 5 per cent white rice and $940 a tonne for the remaining 15 per cent white rice.

Malaysia wants total stocks of 500,000 tonnes and is negotiating with Vietnam to supply about 100,000 tonnes. It is expected Kuala Lumpur will open the next round of talks for purchasing the remaining stocks next month, which should drive rice prices higher.

Rice Exporters Association president Chookiat Ophaswongse said the results of the talks has marked up the Thai rice price after a slight drop last month due to a slowdown in export orders.

"From now, rice prices should remain high as the world market has shown high interest to purchase rice from Thailand, which is the only country to export rice without a control policy," Chookiat said.

The association will soon distribute export quotas to private companies, which will depend on their export records over the past two years.

Asked about the overflow of orders of rice to Thailand amid a slowdown in the exports of competitors, Chookiat affirmed that Thailand still has a high capability to supply rice to the world market.

Thailand is expected to export 9.5 million tonnes of rice this year. Exports in the first four months reached 4.06 million tonnes, an increase of 46 per cent in volume from the same period last year.

The Food and Agriculture Organisation (FAO) reported yesterday that rice production in Asia, Africa and Latin America is forecast to reach a record level in 2008,

warning that world rice prices

could remain high in the short term as much of the 2008 crop will

only be harvested by the end of the year.

"World paddy production in 2008 could grow by about 2.3 per cent, reaching a new record level of 666 million tonnes, according to our preliminary forecasts," said FAO rice expert Concepcion Calpe.

Production growth could be even higher if recent appeals and incentives to grow more rice lead to a larger expansion of planting, according to the Rice Market Monitor.

"But the cyclone disaster in Myanmar [Burma] could well worsen our forecast," Calpe added.

Burma may need to turn to neighbouring countries such as Thailand and Vietnam for rice imports. This could lead to further pressure on world prices.

"For the first time, paddy production in Asia may surpass the 600 million tonne benchmark this

year, amounting to 605 million tonnes," Calpe said. "Major gains are expected all across the region. Bangladesh, China, the Philippines, Thailand and Vietnam could register the largest gains. Prospects are also buoyant for Indonesia and Sri Lanka, despite some recent flood-incurred losses."