(Updates price in last paragraph.)
Jan. 30 (Bloomberg) -- Rice shipments from Thailand are poised to surge 15 percent this year to help the country win back the top-exporter slot as the government accelerates sales from its record stockpiles, an industry group said.
Exports may climb to 8 million metric tons this calendar year, assuming sales of 1.5 million tons from state inventories, from 6.95 million tons in 2012, said the Thai Rice Exporters Association. India and Vietnam sold more than Thailand last year as shipments tumbled 35 percent to the lowest level since 2000, according to the U.S. Department of Agriculture.
Rice, the staple for half the world, has dropped 16 percent from a three-year high in September 2011 as inventories tracked by the United Nations’ Food & Agriculture Organization swell to a record, curbing food costs. Thailand started buying rough rice from farmers above market rates in October 2011, to lift domestic prices and rural incomes.
“The 8 million-ton target will be achieved as the government has to speed up government-to-government sales,” the group’s president Korbsook Iamsuri, told reporters in Bangkok. Thailand has around 17 million tons of milled rice in stockpiles, the group estimates.
The government has bought 9 million tons of unmilled rice and expects to purchase as much as 11 million tons this harvest, Commerce Minister Boonsong Teriyapirom said Jan. 23. The country will maintain an export target of 8.5 million tons for this year, according to the Department of Foreign Trade.
“Thailand will be more aggressive in terms of exporting the rice,” Samarendu Mohanty, a senior economist at the International Rice Research Institute, said in an e-mail dated yesterday. “It has no other choice.”
The strength of Thailand’s currency against the dollar, reducing the appeal of shipments from the country, may hamper rice sales, Korbsook said. The Thai baht has gained 2.7 percent this month, the second-best exchange-rate performance in Asia after the Indian rupee.
“A sharp rise in baht in recent weeks has made buyers hesitant to place orders as the price in dollar terms has increased,” Korbsook said. “This is a key obstacle in addition to the state purchase program, which has raised costs.”
Stockpiles in Thailand will climb to 11.7 million tons in the 2012-2013 season, according to the USDA, which estimates Thai exports at 8 million tons, followed by India at 7.5 million tons and Vietnam at 7.4 million tons.
World output of milled rice in 2012-2013 is forecast at an all-time high of 465.6 million tons, according to the USDA. The FAO has forecast global reserves climbing to 169.8 million tons by the end of 2012-2013.
Rough rice for March delivery was little changed at $15.505 per 100 pounds on the Chicago Board of Trade at 6:51 p.m. Singapore time. The price of 5-percent Thai white variety was at $599 a ton, compared with $430 from India and $390 from Vietnam, data from the exporters’ association showed.
--Editors: Ovais Subhani, Thomas Kutty Abraham