Thailand tipped to retake crown as world's top rice exporter

[Lite Beer]

Thailand tipped to retake crown as world's top rice exporter
Bangkok, Thailand | AFP |

BANGKOK: -- Two years after losing its place as the world's biggest rice exporter, Thailand is eyeing a return to the top spot as the impact of a bungled subsidy scheme eases and it sells cheaper grain to a grateful global market.

The subsidy, which offered farmers up to 50 percent above market rates for their rice, helped former premier Yingluck Shinawatra win the rural votes she needed to take office in 2011.

But it also sent tremors through the world market before spectacularly unravelling, leaving Thailand with around 18 million tonnes of over-priced rice and Yingluck skewered by a corruption charge.

Thailand was pushed off the top spot by India in 2012, as buyers hit back at the kingdom's attempt to fund the costly subsidy by driving up global prices through grain hoarding.

India and Vietnam moved swiftly to gobble up Thailand's crumbling market share, with the Indian government rapidly releasing more of their own rice for export.

Thailand's junta, which seized power in May, ended the rice scheme soon after the coup and is flogging stockpiles to soften the price of Thai rice to around $450 a tonne -- comparable to India and Vietnam.

Many now predict the kingdom's industry is again set to surge.

"I'm sure we can get back our world title this year," said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.



- Getting back to the top -



From January until September 2, the kingdom sold seven million tonnes of the grain -- already more than for the whole of 2013 -- according to Chookiat.

It should sell 10 million tonnes by the end of the year, as experts call for farmers to focus on producing higher quality -- and higher value -- strains of rice.

Darren Cooper, senior economist at the London-based International Grains Council, said it is "quite possible (Thailand) could edge out India in 2014", explaining the kingdom has already begun to reclaim portions of the key African market it lost -- such as Nigeria, Ivory Coast and Ghana.

"The real story will be next year when I think Thailand will be easily the world biggest exporter," he said.

Much also depends on India, Cooper added, after New Delhi flooded lower premium rice to the export market to off-set the retreat of the Thai grain and avert a feared global food crisis.

Thailand's military rulers are talking tough on the kingdom's subsidy culture -- including rice and other major exports such as rubber.

They have paid most of the farmers, hundreds of whom took to the streets, after they were left out of pocket as banks refused to lend cash to Yingluck's stricken administration to keep the scheme going.

But to wean farmers off handouts they are focusing on lowering production costs, including of fertilisers and machinery.

The junta has "requested the co-operation" of suppliers to cut costs, said Paitoon Urairong, deputy director general of the rice department at the Ministry of Agriculture and Cooperatives.

It is a request companies have "agreed" to do, he said, emphasising the need for farmers to grow premium rice -- rather than the lower quality grains of the last few years.

While the loss of large state handouts is upsetting farmers, some experts say greater efficiency is to be welcomed.

"It's much healthier to assist farmers by providing input subsidies like seeds and other agricultural input," said Hiroyuki Konuma, regional representative for Asia and the Pacific for the UN Food and Agriculture Organization.

Hiroyuki also lauded a shift towards grains with higher market prices such as jasmine and organic rice.



- 'It's all gone' -



Critics pilloried Yingluck's flagship rice policy for damaging Thailand's biggest export by paying farmers for large harvests irrespective of the quality.

To the protesters who occupied Bangkok's streets for the months in the run-up to May's coup, the policy was a cynical act of populism which tapped state finances purely to shore up Yingluck's rural base in the north and northeast.

Yingluck was found guilty of negligence linked to the scheme and now could face impeachment proceedings that may see her banned from politics.

But she denies wrongdoing and insists the policy was a well-intentioned attempt to raise the income of Thailand's rural poor that was scuppered by her political rivals.

Now, the junta's stance on subsidy is sending jitters across the countryside.

The proposal to slash production costs is "not enough", says Prasit Boonchoei, president of the Rice Farmers Association.

According to him, farmers need to invest an average of 6,500 baht ($200) per rai (1,600 square metres) to produce 800 kilogrammes of rice.

That harvest is worth between 7,000 to 8,000 baht, well below a decent 10,000 baht return, he explains.

This week the junta offered one-off cash payments of around 1,000 baht per rai to ease farmers' woes, but the maximum payment of 15,000 baht falls well short of the guaranteed income from the rice subsidy.

From his farm in Nakhon Pathom province, near Bangkok, Praneet Pinthin says the end of the subsidy has forced to him to withdraw his $4,600 savings to cover rising costs.

"It has all gone," he told AFP, adding he was now in debt -- which the new pay-out will not ease.

-- (c) Copyright AFP 2014-10-05

[kurnell]

At one point Australia had the most sheep in the world. Whoop-de-doo.

[tomross46]

Good luck. The competition is great, and their cost of manufacturing is less expensive , complicated and there are less hands in the process.

[seajae]

is this like the tour de france, they have decided they want it so they are jumping in/claiming it before there is any confirmation, typical of the way some thai authorities work , does this mean they dont have any rotten rice left or given up trying to sell it

Edited October 5, 2014 by seajae

[englishoak]

Edited October 5, 2014 by englishoak

[mrjohndub]

It's not rice that they should be worried about.

[cloudhopper]

Well regardless of whether what has been tipped actually happens, that is a very good trend.

[jacky54]

So it's just tipped to be, not actually the top exporter then

[ramrod711]

"It's much healthier to assist farmers by providing input subsidies like seeds and other agricultural input," said Hiroyuki Konuma, regional representative for Asia and the Pacific for the UN Food and Agriculture Organization.

Agreed, but... how much of the fertilizer and seeds will be sold, by farmers, to other countries? We have seen what happens when high prices for rice crops were instituted, rice poured into Thailand from adjoining countries, will we now see seed pouring out?

[NeverSure]

"Tipped to become." Never heard that term.

I'll give them a couple of tips. Don' spend money you don' gots an' don' drink until you tipsy like dat in the 'hood.

[FangFerang]

One month ago they said that over 50% of all rice in storage was substandard. Um....where is this rice coming from?

[cloudhopper]

There is a market for everything.

[Thai at Heart]

And whilst shovelling all this VOLUME, the farmers are crying because they aren't making enough profit.

So any suggestion while Khun Chookiat laughs all the way to the bank?

[MILT]

Yea Team!

[chooka]

And the P.M is ordering farmers not to plant additional crops because of the pending severe drought next year. Who is operating all these stupid departmental mouthpieces?

[chooka]

And the P.M is ordering farmers not to plant additional crops because of the pending severe drought next year. Who is operating all these stupid departmental mouthpieces?

[Thai at Heart]

And the P.M is ordering farmers not to plant additional crops because of the pending severe drought next year. Who is operating all these stupid departmental mouthpieces?

Ironically the best situation is that they do start paying people to stop growing unwanted rice.

They can reduce production by a percentage to firm up prices. Of course , that despite being a very logical thing to do, is tarred as populist. Irrespective of the fact that there isn't enough water.

Crazy issues in Thailand.

[ggt]

Fortunes are looking up for Thailand...this has more prestige among other nations...than the edible bugs...chicken eggs...and porcelain toilet bowls...

[ratcatcher]

There is a market for everything.

Indeed there is. While the Nigerians send their salesmen over to Thailand to promote this n that, Thai agents will fly to Lagos and begin selling very high quality rice from the 2011-2012 crops, offering special deals and easy payment plans. TIT for TAT.

[Robby nz]

And the P.M is ordering farmers not to plant additional crops because of the pending severe drought next year. Who is operating all these stupid departmental mouthpieces?

Ironically the best situation is that they do start paying people to stop growing unwanted rice.

They can reduce production by a percentage to firm up prices. Of course , that despite being a very logical thing to do, is tarred as populist. Irrespective of the fact that there isn't enough water.

Crazy issues in Thailand.

Now come on TaH isn't that pretty much what the pledging scheme was supposed to do ?

Cut down the supply of rice into the market so prices would rise. Didn't work did it.

Of course keeping it and selling it at a profit later was also part of the scheme.

Telling farmers not to plant rice, OK fair enough but there is a catch, well for the farmers anyway.

You see if they don't plant rice they don't have a crop to sell so they get no money.

Telling the farmers to change crops doesnt work either, not that many crops they can change to in a lot of places, different crops need different machinery, processing capability, longer lead in time without income and can flood the market with the alternate crops and down go prices for everyone.

But the topic is about the country again being the worlds top rice exporter.

Ok this would come about because of the need to get rid of the stockpile not because of excess production year on year.

We still haven't got the report on how much is in storage and how much is saleable so no idea how long it will take to clear what can be sold for a reasonable price.

However being the top by volume should not be the goal, how about the top by income per ton.

This can only be done by increasing the quality of the crop to attract higher prices.

That is what the boffins and suits should be encouraging the farmers to do and working on ways to make this possible.

There are sensible suggestions as to how this can be done, see the topic where they are all slagging off at the monk.