Thai rice exports fell sharply in the first quarter due to uncompetitive prices but Vietnamese shippers remained busy and that kept prices there firm, exporters said on Wednesday.

From January to March, Thailand, the world's biggest rice exporter, sold 1.7 million tonnes of rice, down 36 percent from the same period last year when it shipped 2.7 million tonnes, according to the Commerce Ministry data.

"If things go on like this, annual rice exports could fall significantly," one exporter said.

The Commerce Ministry still believes Thailand can hit its goal of exporting up to 9.5 million tonnes in 2009, but the Thai Rice Exporters Association expects 8.0 million at best, since high prices are leaders buyers to switch to Vietnam.

Thailand exported 10 million tonnes in 2007.

The price of benchmark 100 percent B grade white rice slipped to $580 per tonne on Wednesday from $600 last week.

Prices are little more than half the record high of $1,080 per tonne marked last April, but that is still expensive compared to Vietnam.

Vietnam's top-quality 5 percent broken grade white rice was unchanged at $460 per tonne this week, well below the same grade of Thai rice which was quoted at $570 per tonne, exporters said.

Despite weak demand, Thai prices were expected to remain firm for a few months, supported by a new government intervention programme that started in mid-March and which expires in July.

The government is buying rice from farmers at 11,800 baht per tonne ($295) to support domestic prices during the harvesting season.

That intervention price, slightly lower than the 12,000 baht per tonne paid in a scheme that ended in February, would peg Thai export prices at around $570-$620 per tonne, exporters said.

In Vietnam, the second biggest rice exporter, the domestic price of 5 percent broken grade white rice stood at 7.20-7.25 million dong ($424-$427) per tonne, the Vietnam Food Association said.

Four vessels were loading a combined 88,000 tonnes of rice at Saigon Port this week, heading for Malaysia, Cuba and the Philippines.

Another 10 vessels left last week with 90,000 tonnes for destinations including Iraq, the Philippines and Malaysia.

The busy loading kept prices firm even though it is the peak of the harvest period for Mekong Delta farmers, with the bulk of the 9.8 million tonnes of winter-spring paddy expected to be picked before the end of March, the Agriculture Ministry said.

Harvesting of the largest of the Delta's three crops a year is due to end next month.

Vietnam's rice exports in the first quarter of 2009 surged 71.3 percent from a year earlier to 1.74 million tonnes, government statistics showed on Tuesday. ($1=16,978 dong) ($1=35.50 Baht).

Source: Reuters