At the two-day seminar "Thailand Rice Convention 2009: the Global Forum on World Rice Trade and Food Security", hosted by the Commerce Ministry's Foreign Trade Department, exporters and importers shared a similar view that Thailand will no longer enjoy robust exports.

Hubert Schlemmer, representative of VA Intertrading, Austria's largest importer for commodities, said Thailand would not be able to maintain its standing as the world's largest exporter in the next five years because of the high price.

"Due to the global economic downturn, the world market, in particular Africa, is very sensitive about price," he said. "Importers will shift to rice from other countries with lower price instead of Thailand as the price of Thai rice was double compared with other suppliers," he said.

The Austrian firm is expected to import only 50,000 tonnes of Thai rice this year, compared to last year's 100,000 tonnes. Imports from Burma jumped from 20,000 tonnes last year to 120,000 tonnes this year, while imports from Vietnam were up from 50,000 tonnes last year to 70,000 tonnes this year.

The president of the Thai Rice Exporters Association, Chookiat Ophaswongse, said export volume would go down to 8 million to 8.5 million tonnes while Vietnam's exports are expected to hit a historic high of 6 million tonnes this year.

Chookiat said this was the first year that the gap in export volume had narrowed to only 2 million to 2.5 million tonnes between Thailand and Vietnam. "The export gap would continue to get narrower as other rice exporters like Burma and Cambodia have increased their supply to the world market," said Chookiat.

Last year, Thailand exported 10 million tonnes of rice, while Vietnam exported 4.7 million tonnes.

He said the high price of Thai rice had made some importers turn to other countries offering a lower price.

Burma has increased its sales volumes significantly. It is expected to export about 700,000 tonnes this year and about 1.5 million tonnes next year. Cambodia has targeted exports of 300,000 tonnes of rice this year. The Cambodian government has vowed it would be able to export up to one million tonnes within the next few years.

Samarendu Mohanty, head and senior economist at the social sciences division of the International Rice Research Institute, said that although the pledging project benefited farmers, it had disturbed the market mechanism.

The most serious problem for the world's rice trading situation is the possibility of the Indian government blocking rice exports this year due to concerns over rainfall.

If India decides not to lift its export ban this year, it would enable Thailand to enjoy higher export volume for another year. However, India may be prompted to allow some exports at any time as its stockpiles have grown to more than 20 million tonnes this year.

Meanwhile, Thai exporters called on the government to accelerate release of a part of its large stockpiles via a small lot of bidding in the market. They said there was a short supply of rice as the price intervention scheme had disrupted the market mechanism.

Sombat Chelermwutinan, president of Asia Golden Rice, said the government should consider releasing a part of its huge rice stocks rapidly, in order to alleviate the shortage for exports.

The stocks should be released in small lots of 300,000 to 500,000 tonnes every two weeks, to prevent the rice price from dropping, he said.

Wanllop Pichpongsa, deputy managing director of Capital Cereals, said this is the right time to release part of the government's stockpiles in order to inject more supply for export. Exporters now have very low stocks on hand as most of the rice has entered the government's warehouses.

Deputy Prime Minister Korbsak Sabhavasu said the government considers the rice policy an important strategy when it should release a part of its stockpiles to the market.

"The government must release our stockpiles, but depending on appropriate factors, as it could affect the price," he said.

To ensure price stability, Korbsak said the government would not set a high pledging price for the next crop. The government would set only a guarantee price that would cover the cost of production with a 20-30 per cent mark-up for farmers.

Source: The Nation