Nov. 10 (Bloomberg) -- Asia Golden Rice Ltd., Thailand’s largest exporter of the grain, expects to increase shipments next year as rising demand and declining global output may help push the country’s exports to a record, boosting prices.

“Unexpected import demand from India and Indonesia will drive the global rice trade higher,” Sarunyu Jeamsinkul, the company’s deputy managing director, said in an interview yesterday. “That will be on top of demand from the Philippines, which may need to import around 2.3 million to 3 million tons, depending on storm damage to its rice production.”

The company may export up to 1.6 million metric tons of rice next year, up about 23 percent from a planned 1.3 million tons this year, as Thailand’s exports may reach a record, Sarunyu said in Bangkok. “2010 will be a golden year for rice,” he said.

Global production may decline after drought in India, the world’s second-biggest grower, slashed the monsoon crop and storms in the Philippines, the world’s biggest buyer, destroyed at least 1 million tons of rice, boosting demand for imports.

“There is a strong possibility we’ll see a rice crisis next year as India faces drought and Indonesia may feel the pinch of El Nino weather,” Sarunyu said. “We may see rice climb above $1,000 a ton, but if the Thai government sells inventories under government-to-government contracts at friendly prices, we could see the price in the $600-$700 range.”

Thai 100 percent grade-B white rice, the benchmark regional export price updated weekly by the Thai Rice Exporters Association, was set at $541 a ton last week. The price surged to a record $1,038 in May 2008.

African Demand

Thai rice exports will approach a record 10 million tons in 2010 on higher African demand and a lack of shipments from India, Chookiat Ophaswongse, the Thai Rice Exporters Association’s president said Oct. 2.

The country’s exports this year may total 8.3 million tons, lower than the association’s target of 9 million tons, as Thai prices are less competitive than rivals and buyers built up stockpiles after prices surged last year, Sarunyu said.

Rice, wheat and palm oil climbed to all-time highs last year, sparking concern among policy makers and food riots in nations including Haiti and Egypt.

The Philippines held its first tender for next-year supplies last week, a month earlier than usual, and is buying at least 850,000 tons of rice in two tenders this year. India may buy as much as 3 million tons next year and become a net importer for the first time in 21 years, Samarendu Mohanty, a senior economist at the International Rice Research Institute, said Oct. 28.

El Nino

Indonesia, the world’s third-largest producer, may shelve plans to export 2 million tons of milled rice next year if dry weather causes production to miss forecasts, state food company Bulog said Oct. 6.

Sea surface temperatures were at least 1 degree Celsius above average across much of the central and east-central equatorial Pacific in the four weeks to Oct. 31, according to a Nov. 2 report by the U.S. Climate Prediction Center. The center considers El Nino conditions to occur when the monthly sea surface temperatures meet or exceed 0.5 degree Celsius.

“The dryness should be coming in anytime now,” Dorab Mistry, director of Godrej International, said yesterday.

Africa will remain a key export market for Thai rice next year and the country faces fierce competition as Brazil, Pakistan and Vietnam plan to increase shipments of so-called parboiled rice to Africa, Sarunyu said.

Thai shipments of parboiled rice to Africa may rise to about 4.5 million to 5 million tons this year, beating a previous forecast of 3.5 million tons, and may increase to 5.5 million tons next year, Chookiat said on Oct. 2.

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

Last Updated: November 9, 2009 21:30 EST