Rice stockpiles in Thailand will reportedly increase 24% to record 15.5 million tonnes in 2013-2014 agricultural year as government's pledging scheme spurring farmers to plant massive crops, USDA estimates
October 16, 2013
(Thai News Service)
– Rice stockpiles in Thailand, once the world's biggest exporter, are expanding to a record amount as the government pledging scheme has spurred farmers to plant massive crops, adding to a global glut, the Bangkok Post reports.
Reserves in Thailand will increase 24% to 15.5 million tonnes in 2013-2014 as global output rises 1.7% to an all-time high of 476.8 million tonnes, estimated the US Department of Agriculture.
However, the Thai Commerce Ministry argued the USDA's estimates are unlikely to be correct, saying no country discloses their actual rice stocks.
"Normally, rice-consuming countries such as China and the Philippines need to keep information on rice stocks confidential," said Deputy Commerce Minister Yanyong Phuangrach. "Even Thai exporters and millers are not willing to share information about their own rice stocks."
Mr Yanyong said Thailand has about 10 million tonnes in government rice stocks, but 5-6 million tonnes have already secured obligations to sell.
He also insisted China's pledge to buy a million tonnes a year from the Thai government over five years is not impossible, as China imports around 5-6 million tonnes of rice a year.
Prime Minister Yingluck Shinawatra said on Sunday China would support plans by domestic firms to buy a million tonnes a year for an indefinite period, an increase from an earlier commitment to take the same volume over five years. Traders reacted with some scepticism because they have seen no evidence to back up earlier government claims of significant rice sales to China and other countries.
The global supply of rice, a staple for half the world, is expanding just as farmers reap record amounts of everything from corn to wheat, driving global food costs to a three-year low.
Thai rice prices fell 24% to $445 this year.
Thai output will gain 4.5% to 21.1 million tonnes in 2013-2014, the USDA said.
Stockpiles in India, Vietnam, Thailand, the US and Pakistan, the five largest shippers, will expand 6.8% to a record 42.6 million tonnes in 2013-2014, said Darren Cooper, a senior economist at the London-based International Grains Council. Global inventories will rise 4.8% to 183 million tonnes, expanding for a ninth year and lifting the stockpiles-to-usage ratio to the highest since at least 2002-2003, reported the UN Food & Agriculture Organization (FAO) in Rome.
Purchases by China, the largest grower and importer, may help curb the price slump. Heat waves earlier this year in China may cut domestic production, as the council is forecasting a 1.1% contraction in output to 141.4 million tonnes. Imports will rise 6.3% to 3.4 million tonnes in 2013-2014, USDA data show.
Global imports will decline this year for the first time since 2009 because of weaker demand from some African and Asian buyers, said the FAO.
Thailand's 30-year reign as the biggest exporter ended last year as shipments dropped 35% to 6.9 million tonnes, as grain from Vietnam and India were much cheaper. The Thai government is under pressure to accelerate stockpile sales, said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.
Korbsook Iamsuri, president of the association, said rice shipments remain bearish. She forecast Thai rice exports to become more active next month until the end of the year as newly harvested Thai Hom Mali sees higher shipments as bulk cargo.
But she warned major white-rice-buying countries like Indonesia, the Philippines and Nigeria have yet to resume their purchase orders.
Sermsak Kuonsongtum, director of Chaiyaporn Rice, said Thai exporters are worried about an excessive global supply, citing good rainfall in India, Vietnam, Thailand and the Philippines. Indonesia also recently announced it has become self-sufficient in rice.
"Oversupply will definitely result in the price falling," he said. "If the Thai government remains committed to offering pledging prices at the same rate to farmers, higher losses will be inevitable."