Thailand's rice exports this year should top 10 million tonnes, based on a 50.5% year-on-year rise to 5.13 million tonnes in the first five months on high demand.

Overseas shipments have exceeded targets each month this year with May exports alone topping 1.16 million tonnes, a rise of 50% over the same month last year, said Pranee Siriphand, deputy director-general of the Foreign Trade Department.

Export revenue from January to May was up 40.7% in to US$2.89 billion, and 30.6% in local currency to 87.69 billion baht. Average export prices were $564 a tonne, down 2% from a year earlier.

However, the Commerce Ministry expects the price to average $600 a tonne for the year compared with $590 in 2010.

"We are confident to outdo our earlier target of 9 million to 9.5 million and shipments this year will be the highest in 10 years," said Ms Pranee.

Chookiat Ophaswongse, the honorary president of the Thai Rice Exporters Association, agreed te new target was achievable as shipments for the rest of the year would only need to average 700,000 to 750,000 tonnes a month.

"But the key challenge is the new government's policy. Thai rice will become immediately less competitive if the new government chooses to restore the rice pledging scheme which promises to pay 15,000 baht a tonne for paddy."

The Pheu Thai Party has promised a return to pledging, replacing the Democrats' price insurance programme, if it forms the government after the July 3 election. Under the insurance programme, the current benchmark is 11,000 baht.

High pledging prices, said Mr Chookiat, would raise Thai rice export prices to about $850 to $870 a tonne from $480 to $500 now, which would discourage buyers.

The difference between the export prices of Thai and Vietnamese rice lately has narrowed to $15-20 per tonne, encouraging buyers to order more Thai rice, he said.

Source: Bangkok Post