Thailand is benefiting from India’s rice export ban and has no reason to halt its own shipments as it has sufficient output for exports and domestic consumption, its commerce minister said on Monday.
India in late July ordered a halt to its largest rice export category in a move that will roughly halve shipments by the world’s largest exporter of the grain, triggering fears of further inflation on global food markets.
The Indian ban provides an opportunity for Thai rice producers, especially in Africa which consumes large volumes of rice from India, minister Jurin Laksanawisit told a press briefing.
“With India’s export ban, global prices rise as volumes drop … farmers can sell paddy rice at higher prices,” he said.
But global prices are volatile and the government will closely monitor the situation, he added.
Thailand, the world’s second-largest rice exporter, is expected to export more than 8 million metric tons of rice this year, Charoen Laothamatas, president of the Thai Rice Exporters Association, told the briefing.
In the first seven months, Thailand shipped 4.8 million metric tons, he said, with monthly exports of 700,000 to 800,000 tons. Last year’s rice exports were 7.71 million tons.
“The world market is very turbulent because of speculation in every market, affecting countries that do not have stocks in hand,” he said.
Thai rice export prices might increase by 20% after the Indian ban, Charoen said.
Exporters were reluctant to quote prices while waiting for more clarity and were likely to halt shipments for a time, said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.
“Now we’re worried about old contracts with delivery over the next two or three weeks as prices are quite volatile,” he said. “But this should be a temporary event, until there is more clarity from India.”
Two trade sources said last week that some rice exporters in Thailand and Vietnam were renegotiating sales contracts for around half a million metric tons for August shipment.
The government would also ensure domestic rice prices do not rise too high, minister Jurin said, adding that inflation is expected to stay low.
“As rice exports remain normal, domestic consumption is not affected yet but paddy rice prices are higher, so rice prices must be managed to stay at appropriate levels,” Jurin said.
Paddy prices were currently a record 12,000 baht ($344.43) per metric ton, he said, with paddy output expected to fall by an annual 5.6% to 32.35 million metric tons this year.