March 26 - MY2009/10 rice production is forecast to increase following increased access to irrigation. Meanwhile, government intervention stocks should reach 8-9 million tons by the end of July 2009 due to an aggressive intervention program which has set program prices higher than world market prices.
Anticipated government intervention stock releases should boost MY2008/09 and MY2009/10 Thai rice exports to 9.0 - 10.0 million tons despite strong competition from Vietnam and India.
Most off-season crop cultivated in the central plain will be harvested by end of March. Meanwhile, government intervention stocks should increase to 8-9 million tons by the end of July 2009 due to an aggressive MY 2008/09 intervention program. Record intervention stock levels will pressure the Government to tender intervention stocks for exports. As a result, MY2008/09 and MY2009/10 rice exports should reach 9.0 - 10.0 million tons despite strong competition from Vietnam and India.
MY2009/10 wheat consumption is expected to remain flat as Thailand’s economic growth expected to be virtually flat. Decreasing prices of imported wheat and domestically produced wheat flour will allow bakeries and instant noodle manufacturers to reduce retail prices of their products. However, demand for wheat-based feed will likely decline. MY 2009/10 wheat imports are forecast to increase slightly due to low beginning stocks. Millers’ inventories dropped significantly to minimize possible losses from bearish wheat prices. Also, imports of U.S. wheat will face strong competition as Australia is now able to supply the Thai market following its crop recovery.
MY2009/10 Mung bean production is forecast to decline slightly in anticipation of continued acreage reduction. Domestic consumption should remain flat due to the weakened Thai economy. MY 2009 Mung bean exports should drop significantly due to lower production and less exportable supplies.
Consumption
Rice is a staple food for Thais with downward trend on annual per capita consumption. However, consumption is forecast to remain unchanged at approximately 7.0 million tons as Thailand slowly recovers from its own economic slowdown. Marginal growth in income levels will keep per capita consumption of rice at around 100 - 110 kilograms. Meanwhile, industrial use will likely decline, particularly for rice-based snack, as consumers reduce spending on snack foods. Rice prices remained high despite a noticeable decline in the second half of 2008 due to the on-going intervention program which set intervention prices higher than world market prices.
Trade
MY2008/09 and MY2009/10 rice exports are forecast at 9.0 - 10.0 million tons despite strong competition from Vietnam and India. Thailand’s exportable supplies will remain competitive largely through government intervention stock releases, particularly for white rice. Most white rice exports since the beginning of CY2009 have been white rice released from a November 2008 tender (TH8200) at prices 30 percent lower than paid by the Government. As a result, export prices of this white rice were relative cheaper than current market prices. Most of this rice was exported to African countries at the prices competitive with Vietnamese rice. Meanwhile, parboiled rice exports continued the upward trend due to India’s export ban on non-basmati rice throughout 2008. Anticipated removal of the Indian export ban will likely fuel international rice price depression in 2009 as Indian rice prices are much cheaper than Thai.