Thailand: Possible Top World Rice Exporter by 2015

Thailand heading toward regaining position as top world rice exporter by 2015

Global rice production in 2014 could drop for first time in five years but reserves remain ample

14 October 2014, Bangkok, Thailand – This year could be the first year in five years that global rice production has declined after years of record harvests, the Food and Agriculture Organization of the United Nations (FAO) reported in its October issue of the Rice Market Monitor.

Crop prospects have deteriorated in the past few months, reflecting erratic weather conditions across many regions. These, together with an El Niño weather anomaly possibly arising soon, have marred the outlook for global rice production in 2014, now anticipated to fall marginally (by 0.4 percent) to 496.4 million tonnes in milled rice equivalent, marking a third season of below-trend growth, the FAO’s third-quarter Rice Market Monitor (RMM) for 2014 revealed today.

The major output shortfalls, in absolute terms, are expected in India, Indonesia, Nepal, Sri Lanka and Thailand. Yet, there is still much uncertainty, especially concerning the 2014 secondary crops, which Northern Hemisphere countries will soon start sowing for harvest next year.

“While the projected slight decline in global production is worth noting, there are more than sufficient supplies in storage to compensate for the shortfall,” said Hiroyuki Konuma, FAO Assistant Director-General and Regional Representative for Asia and the Pacific. “The huge world reserves would still be sufficient to cover more than a third of the 2015/16 projected world consumption,” Konuma added in reference to the report’s summary.

Konuma added that “Thailand has come closer to regaining its position as number-one rice exporter with 9.6 million metric tonnes of rice exports predicted by the end of 2014 next to India’s 10 million metric tonnes.”

“As for export projections for 2015, it is estimated that Thailand would regain the number one position with 10.6 million metric tonnes of rice exports followed by India (8 million m/t) and Viet Nam (6.9 million m/t),” Konuma said.

Regarding rice stocks, Konuma added “It’s estimated that Thailand would likely hold 18 million metric tonnes of rice stocks by the end of the 2014 season.”

“As for rice imports, China would continue to be the number-one importer of 2.8 million metric tonnes in 2014, followed by the Philippines (1.8 million m/t), Indonesia (1.2 million m/t) and Malaysia (1.0 million m/t),” Konuma said.

Overall, international rice prices edged steadily higher between May and August 2014. But the RMM notes that Thailand’s government release of rice from its large public stocks have been far smaller than originally announced, which has helped to sustain world quotations. However, prices started to recede again in September, amid accrued competition among exporting countries and the first arrival on the market of freshly harvested supplies.

“Many countries have been taking advantage of the lower international prices to rebuild inventories and have been actively buying rice from world markets during the course of 2014,” said Konuma.

Strong demand for rice imports, combined with large supplies in major exporting countries, is expected to sustain a 7 percent increase in the volume of rice transactions in calendar 2014 to a record 39.7 million tonnes, the RMM reports.

World rice trade is expected to grow further in 2015, although by only 0.7 percent, to about 40 million tonnes. African countries are predicted to drive the expansion in world imports, but inflows to Asian countries may remain at above-average levels.

Ample availabilities in exporting countries are also expected to underpin trade in 2015. However, faced with a likely drop in production and increased domestic requirements, exports by India may decline, relegating the country to a number two position among suppliers. With this exception, most of the regular exporting countries are predicted to step up their sales in 2015, especially Thailand, which might recoup its leadership as an exporter.

Global rice utilization is forecast to hover around 500 million tonnes in 2014/15, 1.7 percent more than in 2013/14, sustaining a marginal increase in per capita consumption to 57.5 kg.

With world production falling short of utilization, world rice inventories carried over in 2015 are forecast to be trimmed for the first time in ten years. However, their volume is projected to remain huge, sufficient to cover more than a third of the 2015/16 projected rice consumption.

ENDS

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