Rice production in Thailand 2012, may climb 16 percent to an all-time high in the season from October as farmers expand plantings to offset losses from floods that inundated farms this crop year.
Total output may surge to 36 million metric tons, split between 25 million tons in the main crop and a second harvest of 11 million tons, Apichart Jongskul, secretary-general of the Office of Agricultural Economics, said in an interview today. Annual production may total 31.05 million tons in the current crop year after the floods, down from 34.48 million tons the previous season, data from the Bangkok-based office show.
Higher output from Thailand, together with a record crop from India and shipments from Vietnam, may depress global prices even as the Thai government pursues a policy of purchasing rough rice from farmers above local rates. It’s normal to see a bumper crop after flooding, according to Korbsook Iamsuri, president of Thai Rice Exporters Association, the largest shippers’ group.
“Farmers will increase production to make up for losses from floods,” Apichart said. The government’s price-support program -- introduced by Prime Minister Yingluck Shinawatra last year -- will also encourage farmers to plant more, he said.
Thai rice prices surged to a three-year high of $663 per ton in November as the government started buying the grain from farmers to boost rural incomes. The Asian benchmark price, for 100 percent grade B Thai rice, has since lost 18 percent to $546 as buyers turn to cheaper supplies from Vietnam and India. Rough-rice futures in Chicago fell as much as 0.8 percent to $14.465 per 100 pounds today, declining for a second day.
The “Thai rice price may move in a range of $500 to $600 a ton this year as other key exporters have abundant supplies and buyers opt to purchase from cheaper sources,” Apichart said.
Shipments from Thailand may plunge 33 percent to 7 million tons this year, the lowest level since 2000, according to a Jan. 12 forecast from the U.S. Department of Agriculture. Vietnam may export 6.7 million tons, the USDA said.
The worst floods since 1942, which struck Thailand during the current crop year, damaged 16 percent of rice farms, inundated more than 8,000 factories and caused $41 billion of damage to the economy, according to government data. The government plans to spend 350 billion baht on flood defenses.
A government plan to use some rice farms to store water during the rainy season is unlikely to cut production as it will just change the timing of planting, without cutting land sown to rice, Apichart said.
India may harvest a record 102 million tons in the 2011- 2012 season ending in June after farmers boosted planting and the crop escaped damage from floods and pests, the All India Rice Exporters’ Association said on Jan. 9.
Thailand’s output of sugar cane in the year from November 2011 will probably climb to a record 101.4 million tons, while natural-rubber output may gain to 3.5 million tons this calendar year, Apichart said. Thailand is the world’s largest rubber exporter and second-biggest sugar shipper.
Total output may surge to 36 million metric tons, split between 25 million tons in the main crop and a second harvest of 11 million tons, Apichart Jongskul, secretary-general of the Office of Agricultural Economics, said in an interview today. Annual production may total 31.05 million tons in the current crop year after the floods, down from 34.48 million tons the previous season, data from the Bangkok-based office show.
Higher output from Thailand, together with a record crop from India and shipments from Vietnam, may depress global prices even as the Thai government pursues a policy of purchasing rough rice from farmers above local rates. It’s normal to see a bumper crop after flooding, according to Korbsook Iamsuri, president of Thai Rice Exporters Association, the largest shippers’ group.
“Farmers will increase production to make up for losses from floods,” Apichart said. The government’s price-support program -- introduced by Prime Minister Yingluck Shinawatra last year -- will also encourage farmers to plant more, he said.
Thai rice prices surged to a three-year high of $663 per ton in November as the government started buying the grain from farmers to boost rural incomes. The Asian benchmark price, for 100 percent grade B Thai rice, has since lost 18 percent to $546 as buyers turn to cheaper supplies from Vietnam and India. Rough-rice futures in Chicago fell as much as 0.8 percent to $14.465 per 100 pounds today, declining for a second day.
The “Thai rice price may move in a range of $500 to $600 a ton this year as other key exporters have abundant supplies and buyers opt to purchase from cheaper sources,” Apichart said.
Shipments from Thailand may plunge 33 percent to 7 million tons this year, the lowest level since 2000, according to a Jan. 12 forecast from the U.S. Department of Agriculture. Vietnam may export 6.7 million tons, the USDA said.
The worst floods since 1942, which struck Thailand during the current crop year, damaged 16 percent of rice farms, inundated more than 8,000 factories and caused $41 billion of damage to the economy, according to government data. The government plans to spend 350 billion baht on flood defenses.
A government plan to use some rice farms to store water during the rainy season is unlikely to cut production as it will just change the timing of planting, without cutting land sown to rice, Apichart said.
India may harvest a record 102 million tons in the 2011- 2012 season ending in June after farmers boosted planting and the crop escaped damage from floods and pests, the All India Rice Exporters’ Association said on Jan. 9.
Thailand’s output of sugar cane in the year from November 2011 will probably climb to a record 101.4 million tons, while natural-rubber output may gain to 3.5 million tons this calendar year, Apichart said. Thailand is the world’s largest rubber exporter and second-biggest sugar shipper.
Rice price has surged 42 percent in the past 12 months, beating rallies in corn and soybeans, while wheat has dropped. The November-delivery contract traded at $17.19 at 8:26 a.m. in Singapore. The price touched $18.54 on Sept. 12, the highest level since October 2008. The rate for 100 percent grade-B Thai rice was quoted at $629 per metric ton on Sept. 7.
Rice, which has beaten corn, wheat and soybeans in the past year, may fall as India restarts non- basmati exports after a ban was lifted, boosting global supplies even as buyers including Indonesia take less than expected.
The Indian shipments will have a bearish impact and futures may average $16 per 100 pounds in Chicago in the fourth quarter, according to Abah Ofon, an analyst at Standard Chartered Plc. That compares with $16.987 so far this quarter. Prices may drop as India’s shipments cut Thailand’s market share in Africa, said Mohammad Ismet, a senior adviser to Indonesian food agency Bulog.
Cheaper rice may improve the lives of the 1.1 billion the World Bank says live on less than $1 a day, while restraining food inflation and cutting the pressure on central banks to raise interest rates. Global food prices have rallied 26 percent in the past year, bolstered by a plan by Thailand, the largest exporter, to buy rice from farmers at above-market rates.
“There will be some short-term fears on India entering the white-rice market,” said Jeremy Zwinger, chief executive officer of The Rice Trader, a weekly industry report based in California. Still, “with Thailand staying strong on the price intervention, there may be a reversal of ideas as India sells quantity very quickly.”
India’s government, which banned private companies from shipping non-basmati rice in April 2008 amid a global food crisis, lifted that restriction on Sept. 8. Exports from the second-largest producer may total 4 million tons for the year from April 1, Vijay Setia, president of the All India Rice Exporters Association, said on Sept. 13.
Indian exports will account for 11 percent of the global rice trade this year, overtaking the U.S. and Pakistan to become the third-largest shipper, according to projections from the U.S. Department of Agriculture, or USDA, in a report on Sept. 12.
“I don’t see rice prices running away,” Ofon, the analyst at Standard Chartered, said in an interview in Singapore today. “Prices will moderate.”
‘Quite Dangerous’
The end of India’s curb, coupled with Thailand’s plan, may add to volatility, exposing traders to potential losses, said Amit Gulrajani, general manager for rice trading and shipping at Olam International Ltd., one of the world’s three biggest rice traders. “Going long or short could be quite dangerous,” said Gulrajani, referring to bets on gains and losses.
Imports by Indonesia may be capped at 1.2 million tons this year, said Bulog’s Ismet. That’s less than a forecast of 2.2 million tons from the USDA. Imports include the 400,000 tons bought from Vietnam last week, Ismet said.
Bangladesh, South Asia’s biggest buyer, may cut its forecast for imports by half as local output climbs, according to the Bangladesh Directorate General of Food. Shipments may total 400,000 tons in the year from July 1 compared with 800,000 tons estimated two months ago, according to Badrul Hasan, director for procurement at the Bangladesh Directorate General of Food. Imports were 1.26 million tons in the year to June 30.
Record Production
Global output may climb to a record 458.4 million tons in 2011-2012, buoyed by larger harvests in China, the Philippines and the U.S., according to the Sept. 12 report by the USDA. That would be a second year of record supply, outpacing demand and lifting so-called ending stockpiles to the highest level in nine years, the USDA said.
Thailand plans to pay 15,000 baht per ton ($493) for unmilled white rice and 20,000 baht for Hom Mali fragrant rice, as much as 50 percent above current rates, according to Bloomberg News calculations based on data from the Thai Rice Mills Association. The country is willing to give up its position as largest exporter to boost rural incomes, Deputy Prime Minister Kittiratt Na-Ranong said on Sept. 12. State purchases are due to start on Oct. 7.
Thailand’s rice-buying policy may “create problems” for the government as it will inflate stockpiles and the state may be unable to sell them on the open market without losses, Abdolreza Abbassian, senior economist at the Food & Agriculture Organization, said in an interview in Singapore yesterday.
The Thai export price may gain to about $650 a ton by the yearend, said Kiattisak Kanlayasirivat, a director at Novel Commodities SA’s Thai office, who correctly forecast a rally late last year. “That is the level that buyers can accept.”
Rice, which has beaten corn, wheat and soybeans in the past year, may fall as India restarts non- basmati exports after a ban was lifted, boosting global supplies even as buyers including Indonesia take less than expected.
The Indian shipments will have a bearish impact and futures may average $16 per 100 pounds in Chicago in the fourth quarter, according to Abah Ofon, an analyst at Standard Chartered Plc. That compares with $16.987 so far this quarter. Prices may drop as India’s shipments cut Thailand’s market share in Africa, said Mohammad Ismet, a senior adviser to Indonesian food agency Bulog.
Cheaper rice may improve the lives of the 1.1 billion the World Bank says live on less than $1 a day, while restraining food inflation and cutting the pressure on central banks to raise interest rates. Global food prices have rallied 26 percent in the past year, bolstered by a plan by Thailand, the largest exporter, to buy rice from farmers at above-market rates.
“There will be some short-term fears on India entering the white-rice market,” said Jeremy Zwinger, chief executive officer of The Rice Trader, a weekly industry report based in California. Still, “with Thailand staying strong on the price intervention, there may be a reversal of ideas as India sells quantity very quickly.”
India’s government, which banned private companies from shipping non-basmati rice in April 2008 amid a global food crisis, lifted that restriction on Sept. 8. Exports from the second-largest producer may total 4 million tons for the year from April 1, Vijay Setia, president of the All India Rice Exporters Association, said on Sept. 13.
Indian exports will account for 11 percent of the global rice trade this year, overtaking the U.S. and Pakistan to become the third-largest shipper, according to projections from the U.S. Department of Agriculture, or USDA, in a report on Sept. 12.
“I don’t see rice prices running away,” Ofon, the analyst at Standard Chartered, said in an interview in Singapore today. “Prices will moderate.”
‘Quite Dangerous’
The end of India’s curb, coupled with Thailand’s plan, may add to volatility, exposing traders to potential losses, said Amit Gulrajani, general manager for rice trading and shipping at Olam International Ltd., one of the world’s three biggest rice traders. “Going long or short could be quite dangerous,” said Gulrajani, referring to bets on gains and losses.
Imports by Indonesia may be capped at 1.2 million tons this year, said Bulog’s Ismet. That’s less than a forecast of 2.2 million tons from the USDA. Imports include the 400,000 tons bought from Vietnam last week, Ismet said.
Bangladesh, South Asia’s biggest buyer, may cut its forecast for imports by half as local output climbs, according to the Bangladesh Directorate General of Food. Shipments may total 400,000 tons in the year from July 1 compared with 800,000 tons estimated two months ago, according to Badrul Hasan, director for procurement at the Bangladesh Directorate General of Food. Imports were 1.26 million tons in the year to June 30.
Record Production
Global output may climb to a record 458.4 million tons in 2011-2012, buoyed by larger harvests in China, the Philippines and the U.S., according to the Sept. 12 report by the USDA. That would be a second year of record supply, outpacing demand and lifting so-called ending stockpiles to the highest level in nine years, the USDA said.
Thailand plans to pay 15,000 baht per ton ($493) for unmilled white rice and 20,000 baht for Hom Mali fragrant rice, as much as 50 percent above current rates, according to Bloomberg News calculations based on data from the Thai Rice Mills Association. The country is willing to give up its position as largest exporter to boost rural incomes, Deputy Prime Minister Kittiratt Na-Ranong said on Sept. 12. State purchases are due to start on Oct. 7.
Thailand’s rice-buying policy may “create problems” for the government as it will inflate stockpiles and the state may be unable to sell them on the open market without losses, Abdolreza Abbassian, senior economist at the Food & Agriculture Organization, said in an interview in Singapore yesterday.
The Thai export price may gain to about $650 a ton by the yearend, said Kiattisak Kanlayasirivat, a director at Novel Commodities SA’s Thai office, who correctly forecast a rally late last year. “That is the level that buyers can accept.”
