Thailand to regain top rice exporter position
Desperate for revenues, Thailand has this year been selling larger quantities of the grain from state warehouses at low prices to private traders. Thailand-origin rice was offered at the lowest price in an international tender from Iraq's state grains buyer to purchase at least 30,000 tonnes, European traders said on Tuesday.
The push could boost Thailand's rice exports to 9 million tonnes in the 2014 calendar year from 6.7 million a year ago, according to a March report issued by a U.S. Department of Agriculture attache in Thailand. India's exports in the 2014 calendar year are expected to be lower than that, industry executives said.
Thailand is now offering 5 percent broken rice RI-THBKN5-P1 at $390 to $395 per tonne free-on-board basis, compared to India's offer price of $400.
The Southeast Asian nation usually charges a premium over Indian rice due to its longer grains.
"India and Thailand are quoting nearly the same price for 5 percent broken rice. Thailand's prices need to go up by $40 per tonne to make Indian exports viable," said M. Adishankar, executive director at Sri Lalitha, a leading rice exporter based in the southern Indian state of Andhra Pradesh.
Problem of Plenty
Since the first week of February, Thailand has cut export prices of 5 percent broken rice by nearly 12 percent, compared with a 2 percent drop in export prices from Vietnam, the world's second-biggest exporter. Indian prices rose 2 percent during the same period as the rupee strengthened.
"For some grades Thailand has been offering discounts compared to Indian prices. Indian exporters can't lower prices substantially due to the appreciating rupee," said M.P. Jindal, president of the All India Rice Exporters Association.
A strong rupee cuts the returns of exporters. The Indian currency has risen nearly 3 percent since the start of February.
The imposition of a 110 percent import duty on rice last year by Nigeria, a major importer of the grain from India, could further hamper exports from the South Asian country.
India mainly exports non-basmati rice to African countries such as Nigeria, Senegal and Benin, while Iran, Saudi Arabia and United Arab Emirates are key buyers of its basmati rice.
"Shipments to Nigeria are hit due to the new duty structure," said Adishankar of Sri Lalitha.
Other African buyers are switching to Thailand as the government has been aggressively selling stocks from its warehouses, the exporters said.
Slowing exports will add to India's problem of plenty in foodgrains. Rice inventories with India's state-run agencies have already jumped above 30 million tonnes as on April 1, government data shows, against a target of 14.2 million tonnes. Moreover, the country is estimated to produce a record 106.19 million tonnes rice in the year to July 2014.
"Slowing exports mean more and more farmers will sell their crop to the government, but it doesn't have enough storage space," said a rice miller based in Kakinada, Andhra Pradesh.
- Texas fall armyworms out early due to unseasonable rains
- Scout for western bean cutworm, western corn rootworm in Ohio
- AgSense releases iPad version of its WagNet Mobile app
- Ag markets posted divergent moves again Thursday
- Ag markets remained mixed at midsession Thursday
- Be wary of wheat quality after wet weather
- Don’t link bird decline and use of neonicotinoids
- Commentary: Setting the record straight on 'Waters of the U.S.'
- Look at fertilizer pricing 2013 vs. 2014
- Solar energy jobs increase, wind power decrease
- Setting the record straight on 'Waters of the U.S.'
- Comments end for Enlist Duo but not the fight