Thailand Is Poised to be the World's Second-Biggest Rice Exporter This Year
Thailand's rice exports are recovering after the government ended its controversial stockpiling policy. The country is poised to be the world's second-biggest rice exporter this year, the Food and Agriculture Agency predicted on Thursday.
The United Nations body said in its biannual food outlook that Thailand is now on track to export 8.7 million metric tons of rice in 2014, putting it second to India, which the agency predicts will hold the top spot at 9.5 million metric tons.
Thailand lost its crown as the world's leading rice exporter in 2012 because of the government's rural income-support policy, which paid farmers above-market prices. The program also left Thailand laden with huge stockpiles of rice and debts, and contributed to political turmoil. The government suspended the program in February, which caused a resurgence of Thai rice sales into global markets.
Vietnam and Thailand both exported about 7 million metric tons of rice last year, according to the FAO.
Despite increased exports, Thailand's farm revenues are now crimped by lower international rice prices for some grades. The FAO's latest rice-price data for April show that while rice prices on average were stable from the previous month, benchmark Thai white 100% B rice plunged 5.1% from March.
The FAO attributed this to Thailand's failure to win a large Philippines' tender in April for 800,000 tons of rice. That tender was won by Vietnamese companies.
Darren Cooper, an analyst at the London-based International Grains Council, said that the Philippines tender was a "barometer of the fortunes for Thai rice exporters."
The FAO forecasts that production in the region will drop marginally, by 0.5%, compared with the previous year.
This fall is likely in part because of potential climatic effects from the possible return of El Niño, but is also because of "less favorable price incentives." The FAO predicted a 2% drop in rice planting and production in Thailand this year because of falling prices.
Meanwhile, the Vietnamese government is encouraging farmers to shift production away from rice to higher-yielding, more profitable crops like maize and soybeans