April 22 (Bloomberg) -- Rice exports from Thailand, the world’s largest shipper of the grain, may gain more than expected this year, boosted by strong demand from the Middle East and Asia, according to the Ministry of Commerce.
“Shipments will probably exceed 9.5 million metric tons this year if we continue selling 1 million tons a month,” Permanent Secretary for Commerce Yanyong Phuangrach, said at a conference in the outskirts of Bangkok today. That figure, forecasted by the government in January, compared with 9 million tons last year.
Rice, the staple food for half the world, gained to the highest level in more than two years in February when global food costs rose to a record, the United Nations data showed. Thailand, which represents one-third of global shipments of 30 million tons, exported 3 million tons in the first quarter of the year, Yanyong said. That was a 40 percent increase from 2.14 million tons last year, according to the Ministry of Commerce.
“Rice trade this year will be outstanding both in terms of quantity and prices,” Yanyong said without providing a price forecast. “Prices are unlikely to fall despite new crops coming onto the market because overseas demand is strong,” Yanyong said.
The July-delivery contract on the Chicago Board of Trade gained as much as 1.1 percent to $14.380 per 100 pounds and settled at $14.31 yesterday. Futures reached a record $25.07 in April 2008.
Strong overseas demand is expected from Africa, Bangladesh and the Middle East, said Yanyong. About 4 million tons of rough rice is expected to be harvested in May and another 1.4 million tons will be harvested in June, he said.
Exports Jump
Thailand reached deals to supply a total of 250,000 tons of rice to Bangladesh and Iraq under government-to-government contracts for a delivery by May, said Pranee Siriphand, deputy director general at the Department of Foreign Trade.
“Normally exports are quite slow during the beginning of the year. If we can sell this much in the first three months, we’ll definitely ship 10 million tons this year,” said Sermsak Kuonsongtum, vice president of Thai Rice Exporters Association.
“The Price should peak at $550 a ton this year in the third quarter when supplies subside,” said Sermsak said.
Thai 100 percent grade-B white rice has fallen 8.8 percent so far this year and was last at $506 a ton on April 20.
Thai rice output from the country’s main harvest in the crop year starting October may rise 4.6 percent to 23.2 million tons, the Office of Agricultural Economics said. The main harvest represents 70 percent of the country’s total output.
Indonesia, the world’s second-largest buyer after Nigeria, is estimated to import 1.75 million tons of rice, the U.S. Department of Agriculture said in a monthly report on April 11. Malaysia may increase imports to 1.04 million tons, making it the second-largest Southeast Asian buyer, it said.
The Philippines’s rice import plan this year will stay at 860,000 tons, Agriculture Secretary Proceso Alcala said April 19.
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