Thailand, set to be the world’s biggest rice exporter this year, may harvest a record crop as a government plan to lift farm income boosted planting, said the Office of Agricultural Economics.
Production of unmilled rice in the year started October will increase 9.4 percent to 37.9 million metric tons from a year earlier, while planting area expanded 0.8 percent to 78.8 million rai (12.6 million hectares), the office said in a statement today. The main harvest, accounting for 69 percent of annual output, will rise 12.6 percent to 26.2 million tons, while production from the second crop may add 11.7 million tons.
Higher production of the staple for half the world may curb prices in Chicago as inventories tracked by the United Nations’ Food & Agriculture Organization swell to a record 169.8 million tons. World output of milled rice in 2012-2013 is forecast at an all-time high of 465.3 million tons, according to the U.S. Department of Agriculture. Thailand started buying rough rice from farmers above market rates in October last year, to lift domestic prices and rural incomes.
“Attractive prices motivated farmers to increase plantings, boosting production to a record,” Apichart Jongskul, secretary-general of the office, told Bloomberg on the sidelines of a press conference. Drought may cut production in some areas but farmers will replant to make up for potential losses, he said.
Rough rice for delivery in January was little changed at $15.41 per 100 pounds on the Chicago Board of Trade at 4:31 p.m. Singapore time. While futures have climbed 3.7 percent this year, they are 17 percent below a three-year high of $18.54 reached on Sept. 12, 2011.
Thailand will export 8 million tons of milled rice in 2012-2013, according to the USDA, surpassing last year’s top shippers India and Vietnam.