Rice exports tipped to fall as rivalry bites

Economy December 28, 2018 01:00

By   THE NATION

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EXPECTATIONS for the country’s rice exports next year have been scaled back in the face of intense competition from fellow producers.



The Thai Rice Exporters Association estimates exports will come in at 10 million tonnes in 2019, shrinking from the forecast 11 million tonnes for this year,

The association disclosed the forecast after a meeting of the Rice Policy and Management Committee that was chaired by Prime Minister Prayut Chan-o-cha yesterday.

Association president Charoen Laothammatas said those at the meeting acknowledged that the global and Thai rice environments in 2018 and 2019 were different. Thailand, as of early December, had posted exports that had so far this year amounted to 10.2 million tonnes.

Shipments of the grain in December are expected to reach 900,000 tonnes, ensuring that the target of 11 million tonnes for the year will be reached.

The lowered estimate of 10 million tonnes for next reflects the high competition among producers, particularly from India, where its government subsidises 5 per cent of export prices. The Indian rice price has also become attractive as a result of the Indian rupee's 10-15 per cent depreciation. Adding to the pressures, major rice-importing countries such as the Philippines, Indonesia and China plan to import less next year.

Charoen said that China bought 700,000 tonnes of rice from Thailand, under a government to government agreement for a purchase of 1 million tonnes. Thailand began exports to the Philippines under a contract for the supply of 75,000 tonnes.

Commerce Ministry permanent secretary Boonyarit Kalayanamit said global rice production would drop by 3.93 million tonnes to 491.14 million tonnes in the 2018-19 production year, due mainly to drought and floods in China. Less-than-estimated rainfall in India and the Philippines' damaged rice production from a typhoon would also contribute to the reduced global volume. In contrast, global rice consumption is forecast to rise by 6.74 million tonnes to 489.56 million tonnes due to a likely rise in consumption in a number of big countries, such as China, India and Nigeria.

For the year to December 11, India was the standout exporter with 11.37 million tonnes, followed by Thailand with 10.35 million tonnes and Vietnam, 6.06 million tonnes. Deputy Prime Minister Chatchai Sarikulya said that the Rice Policy and Management Committee agreed on a Bt1.74-billion insurance project for wet season rice growing, covering 30 million rai, in the 2019 production year.

The project will provide insurance against seven types of natural disasters, ranging from flood, drought, storm and cold weather to hail, fire, forest elephants, pests and disease. The project will apply for all regions, excluding the South, from the start of the production season to June 30 next year. In the South, it will apply from the start of the production season to December 15.

Of the total insurance premium of Bt85 per rai, farmers will pay Btt34 per rai and the government will subsidise them with Bt51 per rai. The Bank |for Agriculture and Agricultural Cooperatives (BAAC) will subsidise Bt34 per rai for its farmer borrowers who grow wet season rice in the 2019 production year.

The committee also approved a time extension to six rice sale projects that had been running from 2008-14, in line with a government policy. The remaining pledged rice - about 1.9 million tonnes – will be sold from this month to September next year.