Thai rice prices may gain about 10 percent after harvests were damaged in Pakistan and China, boosting demand for shipments from the world’s largest exporter, according to the nation’s Office of Agricultural Economics.

The price of 100 percent grade-B white rice, the benchmark for Asia, may advance $40 to $50 a metric ton from the current level, Apichart Jongskul, the office’s secretary-general, said by phone, without giving a timeframe. The price, set weekly by the Thai Rice Exporters’ Association, was $494 a ton on Sept. 1.

Rice shipments from Pakistan, the third-biggest supplier, may plunge after the deadliest floods in the nation’s history, the Rice Exporters’ Association of Pakistan said Sept. 1, while China has also warned of losses to crops. Higher rice prices would boost food costs across Asia.

The crop damage in China and Pakistan will continue to support prices as buyers may seek shipments from Thailand, said Apichart. Thailand’s output in the year from October would be little changed from this year as damage from an earlier drought may be offset by improved yields from wetter weather, he said.

Thai rice prices have rebounded from $458 a ton on July 21. The latest revision is due tomorrow. Apichart’s office helps to execute agricultural policy and planning, as well as conducting research and providing agriculture-related information.

La Nina Rains

Drought linked to the El Nino weather pattern affected a swathe of Asia in the first half, damaging crops from China to Southeast Asia. Thailand’s Meteorological Department said on Aug. 16 that a La Nina phenomenon, which brings wetter-than-normal weather, has developed and will probably intensify.

La Nina will improve water level in reservoirs, benefiting plantings in November and December, Apichart said. Unmilled rice output in the year from October will likely total 31.3 million tons, compared with this year’s 31.5 million tons, he said.

Source: Bloomberg