Rice exports are forecast to reach 8.5-9.5 million tonnes next year, close to this year's estimated 8.5 million tonnes worth 200 billion baht despite being hit by the worst flooding in recent years.

Commerce Minister Porntiva Nakasai told a seminar entitled "Thailand's Rice Policy for 2011" that despite the floods, rice exports will not decline.

She said export quality, not quantity, will be the focus the next five years, particularly for premium-grade rice.

Mrs Porntiva said with the focus on quality, the value of rice exports could increase to 500 billion baht or more.

She also said Thailand will co-operate closely with neighbors such as Vietnam, Laos and Cambodia to curb price-cutting by them, while the country will help with marketing.

Global rice prices are expected to be volatile next year but generally on an uptrend, as natural disasters have dampened output worldwide while demand remains high.

However, Agriculture Minister Theera Wongsamut said in an interview that output from this year's main harvest may fall below previous estimates, as the worst floods in five decades have devastated crops.

It could be the worst damage to rice crops since the 2006 floods, he said.

Mr Theera said output of rough rice from the main crop, which began being harvested last month and accounts for 70% of total production, may fall by 7% from last year.

Production from the main crop is estimated to decline by 1.6 million tonnes to 21.7 million, he said.

The flooding, which affected two-thirds of the country, may slash the country's economic growth by 0.3 percentage point this year to 7.9%, state planning agency the National Economic and Social Development Board said this week.

Some 11 million rai of agricultural land or 8.5% of the total have been inundated, said Mr Theera. Floods deluged 8.3 million rai of riceland or 15% of the area for main-crop production.

Four million rai of rice crops are believed to be entirely devastated, he said. Actual damage numbers will be finalised about mid-December, he said.

Second-crop production, which begins next April, may rise to 9.3 million tonnes from 8.26 million last year, when drought caused by the El Nino weather phenomenon and the spread of brown planthoppers hurt yields, he added.

Charnchai Rakthananon, president of the Thai Rice Millers Association, said the combined milling capacity of all Thai millers is 100 million tonnes of paddy rice, while total output is 30-33 million tonnes.

He said with the excess milling capacity, Thailand could make use of its Asean Free Trade Area privilege with Vietnam, which has up to 45 million rai of ricefields and expects to export seven million tonnes this year, part of which is imported paddy from Cambodia for milling and export.

This positions Vietnam as a rice trader while Thailand cannot import paddy from its neighbours to mill.

Mr Charnchai urged the government seriously to consider importing paddy for processing and export.

Somporn Isvilanonda, a senior fellow at the Knowledge Network Institute of Thailand, said rice prices will remain on an uptrend next year, particularly jasmine rice, which will suffer reduced output output from the flooding.

CP Intertrade, the international trading arm of the Charoen Pokphand Group, said the massive floods will cause rice output to fall from 22.9 million metric tonnes to 21.8 million, a decline of 4.8%.

From January to October, Thailand exported 7 million tonnes of rice, down by 2.27% from the same period last year, but still expects to reach 8.7-9 million tonnes by year-end.

Source: Bangkok Post