Rice Update

An Expert's View about Agriculture and Animal Husbandry in Thailand

Last updated: 7 Feb 2012

TH1137 MY2011/12 main-crop production is revised down to 21.6 million tons of paddy, down 2.7 percent from the previous year, due to higher-than-expected production loss of 1-2 million tons from extensive flooding.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 11/2/2011 GAIN Report Number: TH1137 Thailand Grain and Feed Update Rice Update Approved By: Orestes Vasquez Agricultural Attaché Prepared By: Ponnarong Prasertsri Agricultural Specialist Report Highlights: TH1137 MY2011/12 main-crop production is revised down to 21.6 million tons of paddy, down 2.7 percent from the previous year, due to higher-than-expected production loss of 1-2 million tons from extensive flooding. However, anticipated bumper off-season crop will likely offset the flooding damage. Consequently, total MY2011/12 rice production is expected to remain higher than the previous year by 1.3 percent. Meanwhile, the Paddy Pledging Program will likely absorb approximately half of the main-crop production due to attractive intervention prices. Post: Bangkok 1. Extensive Flooding but likely offset by anticipated bumper off-season crops According to the Ministry of Agriculture and Cooperatives? flooding update for July - October 14, 2011, the flooded agricultural areas have increased to 10.2 million rai (1.6 million hectares), as compared to 6.2 million rai (1.0 million hectares) for July ? September 21, 2011 (TH1125). Most of the agricultural flooded areas are rice planting areas totaling 8.4 million rai (1.3 million hectares), up from 5.2 million rai (0.8 million hectares) from the previous month?s estimate and well above the 2006 severe flooding (Figure 1). Post has revised down MY2011/12 main-crop production to 21.6 million tons of paddy (14.3 million tons milled equivalent), down 2.7 percent from the previous year (Table 1), as production loss will likely increase to around 1? 2 million tons of paddy (around 0.7 ? 1.3 million tons milled equivalent), up from last month?s forecast of 0.6 million tons of paddy (0.3 million tons milled equivalent). MY2011/12 off-season rice production will likely increase to 9-10 million tons, up 12.0 percent from the previous year, due to acreage expansion driven by record reservoir levels (Figure 2) and an aggressive Paddy Pledging Program. The intervention prices were set 50.0 percent higher than current market prices for white rice. The increase in off-season rice production will likely offset the damage from flooding. In addition, on October 25, 2011, the Government approved an increase in its budget to 1.6 billion baht ($53.3 million) to provide seeds to farmers that have been affected by the flooding. The assistance would cover approximately 6.73 million rai (1.1 million hectares), up from last month?s approval of 3.7 million rai (0.6 million hectares). The cultivation will likely begin in December 2011 when the floodwaters recede in the lower North and the Central Plain regions which account for 80 percent of total off-season cultivation. Consequently, MY2011/12 is expected to remain larger than the previous year. Total production is forecast at 31.1 million tons of paddy (20.5 million tons milled equivalent), up 1.3 percent from the previous year. 2. Flooding hindered rice exports in October in addition to competition from Indian rice Thai rice exports in October 2011 is expected to decline to 600,000 tons, far below a monthly average of 1.0 million tons over the past nine months. Floodwaters have blocked highways and disrupted many of the local transportation networks in the Central Plain and Bangkok where most exporters? warehouse and processing facilities are located. The water is slowly receding due to poor floodway management and limited drainage capacity, in addition to a remaining large volume of water. So far, most exporters? facilities have not been adversely affected by the flooding. It will likely be until mid-November that trading activities will normalize, which is the expected timeframe for floodwaters to recede to operational levels. Presently, exporters are holding stocks of around 2-3 million tons of mostly white rice, and are closely monitoring the progress of the Paddy Mortgage Program and its impact on domestic prices. It may be until the end of November that they will finalize any export contracts. Meanwhile, foreign buyers, particularly in African countries, continue purchasing Indian white rice and parboiled rice which are presently $150-165/MT cheaper after India?s removal of non-basmati export ban since September 2011. 3. Aggressive Paddy Pledging Program Expected in mid November 2011 The MY2011/12 main-crop Paddy Pledging Program began on October 7, 2011 and has pledged 341,897 tons of paddy which account for approximately1.4 percent of the total production (Table 2). The program will likely be more aggressive by mid November when main-crop paddy in the Northeast region will be harvested, which accounts for half of total main-crop production, and consists mostly of fragrant and glutinous rice. However, the Government is considering revising down the program?s credit line to 359 billion baht ($12 billion), from the 410 billion baht ($13.7 billion) the Cabinet approved on September 13, 2011, in anticipation of lower main-crop production caused by severe flooding in the North and the Central Plain regions. The program will likely pledge up to 10.0 million tons of white rice and fragrant rice paddy (6-7 million tons milled equivalent) which are approximately half of total main crop production due to attractive intervention prices which are 30-50 percent higher than current market prices. Meanwhile, glutinous rice paddy production of around 6.0 million tons is expected to be marginally pledged as current market price is close to intervention price. Appendix Table: Thailand?s Rice Production, Supply and Demand Rice, Milled T 2009/2010 2010/2011 2011/2012 hailand Market Year Begin: Jan Market Year Begin: Jan Market Year Begin: Jan 2010 2011 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Harvested 10,940 10,940 10,667 10,667 10,955 10,960 Beginning Stocks 4,787 4,787 6,100 6,100 5,562 5,562 Milled Production 20,260 20,260 20,262 20,262 21,250 20,526 Rough Production 30,697 30,697 30,700 30,700 32,197 31,100 Milling Rate (.9999) 6,600 6,600 6,600 6,600 6,600 6,600 MY Imports 300 300 200 200 100 100 TY Imports 300 300 200 200 100 100 TY Imp. from U.S. 4 4 0 0 0 0 Total Supply 25,347 25,347 26,562 26,562 26,912 26,188 MY Exports 9,047 9,047 10,500 10,500 8,000 8,000 TY Exports 9,047 9,047 10,500 10,500 8,000 8,000 Consumption and Residual 10,200 10,200 10,500 10,500 10,900 10,900 Ending Stocks 6,100 6,100 5,562 5,562 8,012 7,288 Total Distribution 25,347 25,347 26,562 26,562 26,912 26,188 Yield (Rough) 3. 2.8059 3. 2.878 3. 2.8376 End of report
Posted: 27 November 2011, last updated 7 February 2012

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