Exports may climb to 7 million metric tons in the year ending Aug. 31, said Samarendu Mohanty, a senior economist at the International Rice Research Institute. That’s more than double the 2.8 million tons shipped in 2010-2011, according to the U.S. Department of Agriculture. Vietnam will export 7 million tons and Thailand 6.5 million tons, USDA data show.
Rice, the staple for half the world, has slumped 17 percent since reaching the highest price since 2008 in September after India ended a three-year ban on exports of non-basmati varieties. Prices will probably stay under pressure in coming months as global production outpaces demand for an eighth year. That may extend a decline in global food costs, which fell for the first time this year in April, United Nations data show. Thailand was the top shipper last year with 10.6 million tons.
“There is a possibility of India emerging as the largest exporter,” Mohanty said in a phone interview from Manila. A good harvest will allow the country to continue exports next year, said Vijay Setia, president of the All India Rice Exporters’ Association. The next crop may be even higher as yields are increasing, he said.
Rough-rice futures for July were little changed at $15.30 per 100 pounds on the Chicago Board of Trade today. Futures reached $18.54 in September.
The harvest in India may climb 7.7 percent to 103.4 million tons from 96 million tons a year earlier, according to the farm ministry. State reserves of rice and wheat jumped 21 percent to 53.4 million tons as of April 1, said the Food Corp. of India. The minimum purchase price of the common variety of raw rice was increased to an all-time high of 1,080 rupees ($20) per 100 kilograms (220 pounds) in June from 1,000 rupees.
Exports of non-basmati varieties exceeded 4 million tons since the ban was scrapped, according to government data. Indian shipments this year will represent 21 percent of global trade estimated at 33.9 million tons by the USDA.
Global paddy production in 2012 is expected to increase 1.7 percent to 732.3 million tons, equivalent to 488.2 million tons of milled rice, exceeding consumption at 477 million tons and boosting inventories, the Rome-based Food & Agriculture Organization said May 4 in its first forecast for 2012-2013.
While the USDA predicts Vietnam will ship 7 million tons this year, the country’s Ministry of Agriculture and Rural Development on May 2 forecast exports of 5.42 million tons, 11 percent below its previous estimate.
Thai Prime Minister Yingluck Shinawatra’s attempts to boost farmer incomes through state purchases since taking power in August has slowed exports and created opportunities for India, said Mohanty. Indian rice is about $100 cheaper than supplies from Thailand, which is paying above market rates to farmers, he said. The Southeast Asian nation has bought 8 million tons from growers so far, he said.
The free-on-board price of 25 percent broken long-grain white rice in Thailand costs as much as $520 a ton compared with $385 a ton in India, said Setia from the exporters’ association. “We are very competitive compared with Thailand because of a large surplus and a weaker rupee.”
The Indian rupee has weakened about 5 percent against the dollar this quarter, making it the worst performing Asian currency. The Thai baht has dropped 0.7 percent.