Rice production in Thailand, the world’s largest exporter, may climb 16 percent to an all-time high in the season from October as farmers expand plantings to offset losses from floods that inundated farms this crop year.
Total output may surge to 36 million metric tons, split between 25 million tons in the main crop and a second harvest of 11 million tons, Apichart Jongskul, secretary-general of the Office of Agricultural Economics, said in an interview today. Annual production may total 31.05 million tons in the current crop year after the floods, down from 34.48 million tons the previous season, data from the Bangkok-based office show.
Higher output from Thailand, together with a record crop from India and shipments from Vietnam, may depress global prices even as the Thai government pursues a policy of purchasing rough rice from farmers above local rates. It’s normal to see a bumper crop after flooding, according to Korbsook Iamsuri, president of Thai Rice Exporters Association, the largest shippers’ group.
“Farmers will increase production to make up for losses from floods,” Apichart said. The government’s price-support program -- introduced by Prime Minister Yingluck Shinawatra last year -- will also encourage farmers to plant more, he said.
Thai rice prices surged to a three-year high of $663 per ton in November as the government started buying the grain from farmers to boost rural incomes. The Asian benchmark price, for 100 percent grade B Thai rice, has since lost 18 percent to $546 as buyers turn to cheaper supplies from Vietnam and India. Rough-rice futures in Chicago fell as much as 0.8 percent to $14.465 per 100 pounds today, declining for a second day.
The “Thai rice price may move in a range of $500 to $600 a ton this year as other key exporters have abundant supplies and buyers opt to purchase from cheaper sources,” Apichart said.
Shipments from Thailand may plunge 33 percent to 7 million tons this year, the lowest level since 2000, according to a Jan. 12 forecast from the U.S. Department of Agriculture. Vietnam may export 6.7 million tons, the USDA said.
The worst floods since 1942, which struck Thailand during the current crop year, damaged 16 percent of rice farms, inundated more than 8,000 factories and caused $41 billion of damage to the economy, according to government data. The government plans to spend 350 billion baht on flood defenses.
A government plan to use some rice farms to store water during the rainy season is unlikely to cut production as it will just change the timing of planting, without cutting land sown to rice, Apichart said.
India may harvest a record 102 million tons in the 2011-2012 season ending in June after farmers boosted planting and the crop escaped damage from floods and pests, the All India Rice Exporters’ Association said on Jan. 9.
Thailand’s output of sugar cane in the year from November 2011 will probably climb to a record 101.4 million tons, while natural-rubber output may gain to 3.5 million tons this calendar year, Apichart said. Thailand is the world’s largest rubber exporter and second-biggest sugar shipper.