Thai exporters left forecast for 2013 rice shipments unchanged at 6.5 million tonnes on Wednesday, citing thin demand from traditional buyers, even though the government was releasing grain from state warehouses. Thailand exported 6.9 million tonnes in 2012 from a record 10.6 million tonnes in 2011. Demand dropped last year after prices rose because of a government intervention scheme which resulted in India toppling Thailand as the world's top exporter.
"It's still a buyers' market and those buying countries are having bumper crops themselves, which means they'll import less rice for the rest of the year," said Chookiat Ophaswongse, a honorary president of the Thai Rice Exporters Association. The government is targeting exports of 8.5 million tonnes this year, confident it can push up the volume with sales through government-to-government channels.
It sold 250,000 tonnes to Iran last week, but traders noted that was insignificant given record high stockpiles of at least 17 million tonnes. In addition to government deals, Thailand is starting to sell rice through tenders. Last week it offered 350,000 tonnes from its stocks but only four exporters put in bids, and for just 90,000 tonnes. It held another tender this week to sell 200,000 tonnes of unmilled rice. This time five exporters showed some interest in bidding. Further details are not yet available.
Overseas demand is not the only thing holding exporters back, with the quality of Thailand's stockpiles in question. "The key reason is that exporters are not quite sure about the quality of the rice from stocks as it has been kept for such a long time," said Charoen Laothamatas, a vice-president of the association.
Although demand was weak, Thai rice prices remain stuck at relatively high levels due to the influence of the government intervention scheme which pays 15,000 baht ($480) per tonne for paddy, higher even than the export price for milled grain. Thai 5 percent broken white rice was at $470 per tonne, little changed from last week's $468, traders said, well above the same grade from Vietnam of $400 a tonne. The Indian grade was offered at $440 per tonne and rice from Pakistan at $425 per tonne.
Vietnamese prices edged up from last week's $397 per tonne because supply fell after end-of-season harvesting finished. "Most Vietnamese grain was drained into the state-backed stockpiling plan and less rice was left on the market," said a Bangkok-based trader who deals in Vietnamese grades. However, traders said the shortfall in supply was not expected to last long as more rice was expected to be released into the market soon.
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