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India may wrest top rice exporter position from Thailand

Vissuta Pothong in Bangkok

Thailand is in danger of having its position as the world's number one rice exporter snatched by India this year as its rice sales fall prey to heavy competition, a senior rice industry executive said on Friday.

Vichai Sriprasert, president of the Thai Rice Exporters' Association, said Thailand was expected to continue losing market share to India in coming months due to its competitive prices.

"India's rice exports are getting closer to Thailand's. Never before has any exporting nation come this close," said Vichai, who is also the owner of Riceland International trading company.

India has emerged as a major international supplier this year and has already this year overtaken Vietnam as the world's number two rice exporter. Vietnam this year is expected to export just three million tonnes, a seven-year low.

India's rice prices have stayed competitive against all other origins since New Delhi announced a subsidy for exporters last June.

Between January 1 and August 31, India exported 4.3 million tonnes of rice, against 900,000 tonnes shipped in the same period last year, Vichai said.

In the same period, Thailand shipped 4.5 million tonnes of rice, versus 4.3 million tonnes in the same period last year.

In August alone, India shipped 965,000 tonnes of rice, a world record high, Vichai said.

"We are worried that Thailand could be displaced by India as the world's top rice exporter if India exports at the same pace in the coming months," Vichai said.

"That would be unfortunate for Thailand, as we have been the world's top rice exporter for decades."

Exports may fall past forecasts

India's 15-per cent broken grade rice was quoted on Friday at around $152 per tonne FOB. It was quoted at around $230 per tonne last May. Thai 15 per cent broken grade was quoted at $183 per tonne FOB.

"We have been careless. We thought India could not export this much. India has been exporting a greater volume because of its cheap prices," Vichai said.

The government forecasts Thailand's rice exports will hit seven million tonnes in 2002, down from last year's record high of 7.5 million tonnes, citing fierce price competition.

Vichai said Thai rice exports may even slip below seven million tonnes.

"The Thai government is still holding a large stock in hand, so they have to manage it well and take any actions before it is too late," Vichai said.

Bangkok is estimated to hold around one million tonnes of rice in stock, bought from farmers at high prices under a state intervention scheme which has eroded competitiveness.

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