Thai Rice Production May Beat Forecast, Official Says

By Supunnabul Suwannakij and Luzi Ann Javier

Nov. 6 (Bloomberg) -- Rice production in Thailand, the world’s biggest exporter, may beat a previous projection in the current crop year as increasing prices drive farmers to plant more, an official said.

Output in the crop year that began Oct. 1 may rise to as much as 35 million metric tons, Chairit Damrongkiat, deputy director general of rice department, said in an interview in Bangkok yesterday. The department’s previous projection for the 2009-2010 crop was 32 million tons.

“We see lower global production,” Chairit said. “This provides us with an opportunity to increase output.”

Higher output from Thailand may slow a decline in global production and boost exports available to buyers including the Philippines, preventing prices from returning to 2008’s record levels. The global rice crop is forecast to drop 2.7 percent to 433.7 million metric tons in the 2009-2010 marketing year, the U.S. Department of Agriculture estimated on Oct. 9.

Rice traded in Chicago jumped 15 percent in the past month on concern that crop losses from storms in the Philippines and drought in India would curb supply and boost demand for imports.

The contract for January delivery last traded at $15.12 per 100 pounds as of 10 a.m. in Singapore. Futures climbed to a record $25.07 in April 2008 as surging food prices sparked protests around the globe.

Production from Thailand’s main crop, harvested from October, is estimated to be about 23 million tons. The output increase is likely to come from the second crop, which is harvested from March, Chairit said.

Supply Response

“You would expect that with these kinds of market price signals that there is certainly potential to see more acreage, particularly in irrigated rice areas,” Eric Wailes, an agricultural economics professor at the University of Arkansas, said Nov. 2. “There will be a supply response into the next spring of 2010.”

India’s wet season harvest, which accounts for 80 percent of the country’s total output, may slump to 65 million tons, from 85 million tons a year ago, said Samarendu Mohanty, a senior economist at the Manila-based International Rice Research Institute.

The weakest monsoon in India since 1972 may help pull stockpiles in the world’s five biggest rice-exporting nations down by a third to 20 million tons in the 2009-2010 marketing year, Concepcion Calpe, senior economist at the U.N. Food and Agriculture Organization, said last month.

Tender Increased

The Philippines, which lost about 1 million tons of rice to Tropical Storm Ketsana and Typhoon Parma, may buy as much as 312,500 tons of rice, 25 percent more than sought in its first tender for 2010 supplies. The Nov. 4 tender took place a month earlier than usual on concern that a supply shortage may cause prices to surge.

The State Trading Corp. of India Ltd. is seeking bids from overseas suppliers for about 10,000 metric tons of 25 percent broken rice for delivery by December at a tender on Nov. 9, according to a notice sent to traders on Oct. 30.

India may import as much as 3 million tons next year, Mohanty said, turning the country into a net importer for the first time in more than two decades.

To contact the reporters on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net Luzi Ann Javier in Singapore at ljavier@bloomberg.net