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UPDATE 2-Thailand aims to remain top rice exporter, traders doubtful

Source : REUTERS
Last Updated: Tue, Nov 06, 2012 06:40 hrs

* Thailand says aims to export 8.5 mln tonnes in 2013

* Thai intervention has pushed prices to uncompetitive levels

* Exporters says target would mean policy change (Recasts with context, traders' comments)

By Apornrath Phoonphongphiphat

BANGKOK, Nov 6 (Reuters) - Thailand is determined to remain the world's top rice exporter by selling up to 7.5 million tonnes this year and 8.5 million tonnes in 2013, a commerce ministry official said on Tuesday, despite prices pumped up by a government intervention scheme.

Thailand, the world's biggest rice exporter since 1983, sold a record 10.6 million tonnes in 2011. This year, it is in danger of losing its top spot because of the rice purchase scheme, a populist measure that has made Thai rice nearly a third more expensive than grain from competitors Vietnam and India.

As a result, exports are so far 44 percent lower than a year ago, but Pranee Siriphand, director general of the Ministry of Commerce's Department of Foreign Trade, said Thailand would still be able to sell more rice than any other country this year and the next.

She said exports this year were likely to range between 7.2 million and 7.5 million tonnes, above Vietnam's export forecast of about 7.2 million tonnes and India's forecast of about 7 million. In 2013, she said, Thailand aims to increase exports to 8.5 million tonnes.

"That means we could retain our position as the world's number-one exporter because our competitors, such as India and Vietnam, are expected to export around 7-8 million tonnes next year," she told reporters without giving further details.

Several traders, however, said Thailand could only significantly boost exports if it scrapped the intervention scheme and accepted lower prices per tonne.

Prime Minister Yingluck Shinawatra extended the scheme into the new season that began in October, paying farmers 15,000 baht ($490) a tonne for paddy, well above the market price, which is put by traders at around 9,000 baht.

The policy has led to an export price for the common 5 percent broken grade of white rice of $550 to $560 per tonne, compared to around $390-$455 a tonne for the same variety from India and Vietnam.

"If the Thai government really eased stocks gradually, it would help increase exports next year and total exports could reach the 8.5 million tonnes target," said Korbsook Iamsuri, head of the Thai Rice Exporters Association.

Korbsook maintained the association's 2012 export forecast at 6.5 million tonnes, and said 2013 exports were likely to remain flat at the same amount.

The government claims it has sold up to 7.3 million tonnes of its stocks to other governments, of which 1.4 million tonnes would be shipped this year and the rest in 2013. But traders remain sceptical in the face of scarce details of the deals.

Last week, Indonesia said it was buying 400,000 tonnes of rice from India and Vietnam, because of their cheaper prices. Nigeria, the only big buyer of Thai rice in recent week, also appears to be reducing its purchases.

Some traders said the government may be forced to cut prices. So far it has 14 million tonnes of milled rice in storage, warehouses are bursting at the seams and officials are considering using private silos and even ill-suited airport hangars.

"Exports may be higher next year, but revenue will drop as the government needs to offload the rice at low prices at some point in order gain more space," said a Bangkok-based trader. ($1=30.8100 Thai baht) (Editing by Alan Raybould and Miral Fahmy)



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