Thailand to Reclaim Top Rice Exporter Status After Weak Indian Monsoon Rains

Thailand is poised to reclaim its status as the world's top rice exporter as weak monsoon rainfall in India is expected to hit the latter's rice output.

Thai rice exports could hit 10 million tonnes in 2014, hovering close to the record 10.6 million tonnes sold in 2011, Duangporn Rodphaya, director general of Thai Commerce Ministry's Department of Foreign Trade told Reuters.

Monsoon rains, which feed India's summer-sown rice crop, were 40% below average in the first six-weeks of the June-September monsoon season.

India's rice exports could drop to eight million tonnes in financial year 2014-15, B V Krishna Rao, managing director at Pattabhi Agro Foods told the news agency.

But India exported a record 10.86 million tonnes of rice in the fiscal year ended 31 March.

Bloating stockpiles

Lower Indian exports will also help Bangkok secure better prices for the grain that it has been selling at a huge discount, curbing losses on the stocks it built under a state rice-buying scheme introduced by the ousted Yingluck Shinawatra government.

Thailand is now offering a variety of old-crop rice at around $395 (£231) per tonne, higher than the $360 (£211) per tonne it demanded for a similar variety of crop, called 5% broken rice, earlier in the year.

But current prices are way short of the estimated cost of 22,000 baht ($680, £398) per tonne that the Yingluck government incurred on the purchase, milling and storage of rice.

Bangkok's military regime plans to export 500,000-600,000 tonnes of rice a month beginning from August. At that rate, it will take nearly three years to sell the 18 million tonnes built under the controversial rice-buying scheme, Reuters reported.

India picture

India is offering 5% broken rice at some $425 (£249) per tonne FOB, up from around $410 (£240) in June.

Farmers had planted paddy on 8.64 million hectares as on 11 July, as against 11 million hectares a year ago.

In the April-June quarter, India exported one-million tonnes of non-basmati rice, dealers estimated, down some 30% from a year ago.

India overtook Thailand two years ago to become the world's leading rice exporter after the Thai scheme rendered Thai rice uncompetitive in the international market, and after New Delhi revoked a four-year ban on non-basmati rice sales in 2011 to trim stocks.

Agriculture employs about two-fifths of the Thai population, with most of them engaged in rice cultivation. The rice-buying scheme propelled Yingluck to election victory in 2011.