Severe floods that have inundated 4 million rai of rice plantations are likely to raise concern among foreign importers as many buyers have rushed to load shipments in recent weeks.

Thai rice exports, which have been slow since the start of this year, have become much more active, with volume in October up 28% year-on-year to 778,200 tonnes.

"It's unusual to see numerous cargo ships in Thai ports busy loading rice this month," said Korbsook Iamsuri, president of the Thai Rice Exporters Association.

"Normally they would avoid this period for fear that the returning ships might get stuck over the long Christmas holidays at their countries' ports."

Mrs Korbsook said news reports of a possible shortfall of rice in Thailand next year due to current floods had prompted a rush by importers to secure big orders, mostly placed from African countries for Thai parboiled rice.

"The export prices of parboiled rice have been volatile this week, at about US$500 a tonne on Wednesday, up $50 from two days ago," she noted.

The price of 100% B grade white rice also rose to $520 a tonne yesterday, from $505 last week.

The Agriculture Ministry reports that floods and heavy rains have affected more than 6 million rai of farmland in 51 provinces, of which 4 million rai are rice plantations. As a result, paddy output is expected to shrink by about one million tonnes, or 4.3% of annual production. The figure does not include damage from the South, where heavy rains struck this week.

However, checks this week revealed that there was not much crop damage to fragrant rice fields, especially in Thung Kula Rong Hai, a major Hom Mali rice area in the Northeast. Details of damage in the central plains remain hard to verify, she added.

"Besides, many provinces will be able to start planting main-crop rice in the near future," she said.
The association plans an intensive crop survey late this month in the Northeast.

Mrs Korbsook said that although she believed current high prices would have a short-term psychological impact, many traders were also concerned that next year's prices might move up unusually, similar to what happened in 2008, if there are big sales by the government.

The government's sales would deplete state stockpiles, which stand at about 2.1 million tonnes at present, down from 5 million early this year after authorities sold 3.1 million tonnes to private companies over the past few months.

Mrs Korbsook said more orders from foreign buyers for delivery next year were expected and would likely lift exports beyond the 8.5 million tonnes estimated in 2010.

However, exporters prefer a stable rice market rather than extreme volatility that occurred in 2008 when export prices hit a record high.

The oil crisis and concerns about food crops being diverted for fuel pushed up commodity prices around the globe and Thai fragrant rice reached a record $1,222 a tonne in May that year.

Source: Bangkok Post