Fewer Indian exports would allow Bangkok to win better prices for the grain that it has been selling at a huge discount, curbing losses on the stocks built up under a costly state intervention scheme.

"It is a good opportunity for Thailand to manage its huge stocks at competitive prices," said Kiattisak Kallayasirivat, managing-director of Bangkok-based Novel Agritrading Co Ltd.

Thai rice prices flipped to a discount versus Vietnam grades for the first time in decades earlier this year as the previous Yingluck Shinawatra-led government aggressively sold from stockpiles. Prices have since risen to par or premiums after the junta stopped sales to inspect the quality of the rice pile.

Thailand plans to export 500,000-600,000 tonnes of rice a month from August. At that rate, it will take about three years to sell the 18 million tonnes built under the rice-buying scheme introduced by the Yingluck government that was ousted in May.

"Thailand will be able to fetch higher prices now that we have concerns over supplies from India and better demand," a Singapore-based trader said adding, "The increase in price will reduce their losses to some extent."

The country sold 5 percent broken rice from its stocks for USD 360 per tonne, on a free on board (FOB) basis, earlier this year but now a similar variety of old-crop rice is being offered at around USD 395 per tonne.


A weak monsoon has raised concerns of the first drought in five years in a country where nearly half of all farmland lacks irrigation.

A poor monsoon cuts exports, stokes food inflation and leads to lower demand for products ranging from cars to consumer goods.

Even a slow start can delay exports of some crops and increase the need for imports.

India's weak monsoon delays sowing of summer crops

-India's weak monsoon has delayed sowing of summer-sown crops such as rice, corn, cotton, pulses and oilseeds, government data showed on July 18.

-Deficit in monsoon rainfall is expected to narrow next week as the grain bowl in the country's northwest, oilseed areas of central parts and cotton belt of the western region are set to get a higher downpour.

The table below gives the area sown with various crops between June 1 and July 17, in million hectares. (Figures are provisional)      

Normal Area 2014 2013
Rice 15.49
Corn 5.60
2.73 6.63
2.16 5.42 
1.72 0.97 2.22
Urad 0.98 0.36 1.30
10.14 3.81 13.66
7.27 1.95 10.32
Groundnut 2.23
1.52 2.69
Cane 4.54 4.61 4.62
Cotton 9.22 5.60 10.05

This, however, is still short of the estimated cost of 22,000 baht (USD 680) per tonne that the ousted government incurred on buying paddy from farmers, milling and storage.

With poor rains cutting Indian supply, Thai rice exports could hit 10 million tonnes this year, near a record 10.6 million tonnes sold in 2011, said Duangporn Rodphaya, director general of Thai Commerce Ministry's Department of Foreign Trade.

India toppled Thailand two years ago to become the world's top rice exporter as the intervention scheme priced Thai rice out of the export market and as Delhi lifted a four-year ban on non-basmati rice sales in 2011 to trim stocks.

But India's output could be hit this year as rains, crucial for the summer-sown rice crop, were 40 percent below average in the first six weeks of the June-September monsoon season.

Indian exports have already been slowing due to aggressive sales by Thailand and Vietnam, said B.V. Krishna Rao, managing director at Pattabhi Agro Foods Pvt Ltd, a leading non-basmati rice exporter in India.

In the June quarter, India exported 1 million tonnes of non-basmati rice, dealers estimated, down almost 30 percent on a year earlier. The country is offering 5 percent broken rice at around USD 425 per tonne FOB, up from USD 410-USD 415 last month.

Indian farmers had planted paddy on 8.64 million hectares as on July 11, compared to 11 million hectares a year ago.

In the year ended March 31, India exported a record 10.86 million tonnes rice. Rao from Pattabhi Agro estimates overseas sales will drop to 8 million tonnes in 2014/15.

"Certainly Thai exporters will gain from India's loss. The quantum depends on how monsoon pans out in next two months," said a New Delhi-based dealer with a global trading firm.


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