Strong exports of parboiled rice have drawn new players and investment into the business, say leading exporters.

About 50 rice millers are planning to remodel their milling process and install steamers and dryers to produce parboiled rice, which is popular in many countries in Africa and the Middle East.

Rice millers, who have seen their business decline since the government terminated its rice-pledging programme early this month, are among new players entering parboiled rice production.

"The move is expected to significantly increase the supply of parboiled rice, by about 50%, and to prop up exports of the grain substantially this year," said Vichai Sriprasert, president of Riceland International Co, a market leader.

Thailand's rice exports - especially of parboiled rice - have benefited greatly from India's absence from the market. India last month announced its suspension of most rice exports except basmati due to severe drought.

The absence of India from the market will likely increase Thailand's parboiled rice exports to between 3 million and 3.5 million tonnes this year, said Mr Vichai.

Restricted Indian exports will also propel Thailand's total rice exports to between 8.7 million and 9 million tonnes for the year, passing a previous forecast of 8.5 million tonnes, according to the Thai Rice Exporters Association (TREA).

"Parboiled rice has become a big export grain since last year, following the global food crisis, and its sales remain brisk with less competition," said Mr Vichai, the TREA's honorary president.

Kasikorn Research Center expects India's absence from the market to lift Thai rice exports strongly from the last quarter of this year through to the first half of 2010 - especially parboiled rice, which could reach 3.5 million tonnes by the end of 2009, up from a normal volume of 2 million.

African countries, which bought about 78% of Thai parboiled rice last year, are likely to shift their orders from India, propelling Thailand's rice exports to nearly 9 million tonnes this year.

Given strong demand from Africa, which imported 4.6 million tonnes of Thai rice last year, exports next year are expected to boom, he said. Mr Vichai.

Parboiled rice - which is made by soaking, steaming and drying rice prior to milling - also has strong markets in Middle East countries such as Saudi Arabia, the United Arab Emirates, Kuwait and Oman. These markets bought parboiled rice from Thailand worth about US$180 million in the first eight months of this year, up 23% year-on-year.

Converting a conventional mill to produce parboiled rice can cost 10 million baht for a capacity of 100 tonnes a day, said Adisak Pramualmitra, executive vice-president of CP Intertrade Co.

Source: Bangkok Post