The government should be keeping a close eye on Thailand's rice export, especially since it fell to third place in world rankings in July.

The industry has to be closely monitored because competition is getting tougher. Last month, Vietnam knocked India off the top rice-exporter spot.

However, there seem to be no signs of Thailand beating Vietnam or India as No 1 this year. In fact, many leading Thai rice exporters expect that the Kingdom will lose its status as a top rice exporter for good.

As of August 21, Vietnam scooted to the top ranking with year-to-date overseas shipments of 4.6 million tonnes, India ranked second with a total volume of 4.57 million tonnes, while Thailand slipped to the third place with 4.36 million tonnes during the same period.

This is the first time in half a century that Thailand has lost its rank as the world's largest rice supplier.

Korbsook Iamsuri, president of the Thai Rice Exporters Association, said the Kingdom lost its ranking mainly because the government was not releasing rice from its stockpiles to meet its government-to-government contracts.

"Export by private firms will probably only stand at 400,000-500,000 tonnes per month because there is no new demand from importers, while other exporting countries are able to provide large volumes of rice at lower prices," Korbsook said.

She added that if the government were not able to meet its G2G contracts this year, then Thailand would definitely be knocked out of the top three. Also, if Thailand loses out to its competitors, it will be difficult for it to find new export opportunities because consumers will become familiar with the newer, cheaper options.

She pointed out that if there were no shipments as per the G2G contracts, then the Kingdom would only be able to export about 6.5 million to 7 million tonnes this year, earning only about US$4.4 billion (Bt137 billion) in revenue. Income from rice exports this year will be $5 billion less than last year because of the drop in export volume from 9.5 million tonnes.

Korbsook added that Vietnam and India were showing great potential, with Vietnam's export volume last month standing at 930,000 tonnes.

A Thai Trade Centre report from Mumbai said that though this year's harvest was affected by heavy rain, India still had enough in its stocks to meet demands.

Last month, India's rice stocks were projected at 28.9 million tonnes, less than the 30.45 million tonnes in July but still three times what it normally has in stock.

Meanwhile, the price of 5-per-cent Thai white rice is a lot higher in world markets than that from India and Vietnam. Thai rice is traded at $600 a tonne, while Indian rice goes for $420 and Vietnamese rice at $440.

The other reason for the dropping exports is that few traders showed up at the recent government rice auction, Korbsook said, adding that only exporters that had definite orders in hand were ready to pay the high prices. Hence the government was unable to achieve its target and was only able to move 229,000 of the 753,000 tonnes it had put up for auction, she said.

Korbsook explained that the proposed price of Bt16,500 per tonne for white rice was rather high given the low demand.

She said the government should start slowly releasing its stocks to make space for the new harvest in October. She also advised it to accept some losses because of the weak demand in world markets, or it would face over-stocking.

According to a private exporter, it is estimated that the government has as much as 12 million tonnes of rice in its stocks, while some 28 million tonnes of paddy is expected to enter the stockpiles from October to September next year.

Sompong Kitireanglarp, president of Ponglarb, one of the leading exporters of rice, agreed with Korbsook, saying the government should start releasing rice in small lots to stop the price from falling and ensure minimal impact to normal trading.

Meanwhile, Commerce Minister Boonsong Teriyaphirom insisted that the government had orders in hand and shipments would be released soon to meet its G2G contracts. He added that the authorities would continue releasing rice from the stockpiles until the end of this year since rice traders' stocks were depleting and the demand was still quite strong.

Yanyong Phuangrach, permanent secretary of the Commerce Ministry, said that though Vietnam had ousted Thailand from the top rank because it was selling at a very low price, Thailand had to maintain its high prices to ensure good returns.

He said the government would be able to release at least 3 million tonnes of rice under its G2G contracts this year.

Source: The Nation