For Thailand, however, this is bad news, as other countries muscle into Thailand’s markets with cheaper rice at a time when the government has been driving up the price through its rice pledging scheme, aimed at enriching farmers using taxpayers’ money.
In addition, last year’s floods in the central provinces – Thailand’s most productive rice-growing area – hit output, adding more upward pressure on Thai rice prices.
Asia, which is the top producer of rice in the world, is set for a three per cent gain in production to
653 million tonnes. Africa was set for a one per cent gain to 25.5 million tones.
The FAO estimates that this should enable the price of rice to continue falling in the coming months as stocks increase and imports decline.
It estimated that global trade in rice will decline by one million tonnes due to better harvests in traditional import countries. One of these is India, which this year resumed rice exports and has overtaken Thailand as the world’s
biggest exporter. According to industry estimates, India exported 2.3 million tonnes of rice between October 2011 and January 2012, while Thailand sold around 2 million tonnes during the same period.
Commerce Ministry data showed that Thailand exported just 350,000 tonnes of rice in January, down 52 per cent from 730,000 tonnes in January 2011.
Earlier this week Vietnam was quoting US$415-425 a tonne for white rice, Pakistan US$435-445 and
India US$445-455, far lower than Thailand’s US$563.
Despite the bad news, the Commerce Minister said he would ask the Cabinet to approve an extension to the rice pledging scheme beyond Wednesday (February 29), when it was due to expire.
AFP