Thailand's rice exporters breathed a sigh of relief on news that India will likely delay its shipments of non-basmati rice. India is expected to postpone the exports from July until the fourth quarter or early next year.

"The Indian government is monitoring the monsoon's progress, but we believe Delhi will definitely wait until the year-end or early next year to resume its rice shipments for fear that the upcoming monsoon may pare its fresh rice output," said Chookiat Ophaswongse, president of the Thai Rice Exporters Association.

India's plans are critical for Thailand's rice outlook, and local traders fear a resumption in non-basmati rice exports would hit hard Thailand's foreign rice shipments in the second half of the year.

India banned non-basmati rice exports last year to stave off shortages at home after last year's world food crisis. But a bumper harvest encouraged it to resume sales to some countries.

In January, it scrapped the export tax on basmati rice and reduced the floor price for shipments. Higher supplies allowed Delhi to export 1 million tonnes of non-basmati rice by state firms, but only for government-to-government deals.The country was only expected to ship 2.5 million tonnes of milled rice, including non-basmati, by year-end.

Thai rice shipments in June were expected to reach 800,000 tonnes, the highest volume of the year, particularly for parboiled rice, as some rice buyers shifted to the Thai grain after India delayed lifting its ban, said Mr Chookiat.

For the first five months of the year, Thailand shipped 5.6 million tonnes, down 27% from the same period last year. Thailand, the world's biggest rice exporter, shipped 10 million tonnes in 2008.

The kingdom produces about 20 million tonnes of milled rice per year, with 10 million for domestic consumption. Vietnam produces 25 million tonnes per year, of which 20 million are consumed locally.

India shipped about 2.9 million tonnes last year - a significant decline from its usual annual exports of 5-6 million tonnes, roughly divided between basmati, parboiled and white rice.

"We are feeling more relieved that the rice shipments would achieve the 8.5 million tonnes target or higher this year," said Mr Chookiat.

Thai rice prices have increased across the board, especially for parboiled rice which rose significantly to US$620 per tonne compared with $550-560 per tonne last month.

Parboiled rice shipments were expected to account for as much as 40% of total rice exports this year compared with 20% in 2008. Shipments of Thai white rice dropped significantly due to its relatively high price, especially when compared with Vietnamese rice.

Source: Bangkok Post