A rumoured withdrawal of India's ban on rice exports would directly affect Thai exporters by resulting in an overwhelming global supply.

However, no one has yet confirmed the rumour, and exporters are awaiting an official announcement from the Indian government.

Thai Rice Exporters Association president Korbsook Iamsuri cautioned against panicking over rumours in the absence of a formal announcement. Exporters are closely watching what India will do.

"If the export ban were lifted, rice prices would continue to decline this year, because there would be a greater supply in the world market amid sluggish demand," Korbsook said.

She said exports of Thai parboiled rice would be hardest hit, because India was a major rival for this kind of rice.

India is said to be mulling whether to lift its ban on exports of basmati rice this year, which would pull down global prices and affect Thai shipments.

The Elephant Group, a major rice importer in Nigeria, said the Indian government was prepared to allow exports of Basmati rice this year, to diminish its flourishing supply after plentiful rains.

Yesterday, the export price of Thai 100percent white rice was quoted at US$479 (Bt15,500) per tonne, up from $471 last week, due to lower supply. Fivepercent white rice rose from $448 a tonne to $450 and parboiled rice from $462 a tonne to $496.

Commerce Ministry permanent secretary Yanyong Phuangrach said Thai rice exports would not be seriously affected if India cancelled the ban.

India must still maintain large reserve stocks and would not export large volumes of rice during a time of drought, he said.

At a recent rice traders' meeting in Dubai, participants predicted global trading in the commodity would reach 30 million tonnes this year. Of that, India will supply 25.3 million tonnes, which is almost what the entire world consumes in a year.

However, Indian rice traders are worried. They say if the government does not cancel the export ban, the country will lose market share to Pakistan.

The Indian government announced the ban in 2008, to ensure a domestic supply. However, a rich supply and rising rice prices worldwide are pressuring India into revising the strategy.

Indian traders also point out too much rice production this year has directly put pressure on them, because they must carry over stocks from last year. Nonbasmati Indian rice was quoted at $500 a tonne previously but has been going for $400 this year, prompting traders to shoulder a loss.

The price will continue to decline, due to the rich supply.

Source: The Nation