Highlights

The planting of the MY2016/17 main rice crop is still 30 percent behind last year. Aggressive sales of government stocks will likely increase Thai rice exports to 9 million metric tons in 2016.

Executive Summary

The planting of the MY2016/17 main rice crop in irrigated areas is 30 percent behind last year’s pace, particularly in the central plains due to the lack of water. This planting delay will likely result in a reduction of the main rice-crop production to 13.8 million metric tons in line with Post’s forecast in April 2016. However, rice exports are revised up to 9 million metric tons in 2016 driven by aggressive sales of government stocks. Post’s forecast for MY2016/2017 corn and wheat remains unchanged.

MY2016/17 main-crop rice planting 30 percent behind

According to Post’s crop survey in July 2016, most farmers began planting their MY2016/17 main rice crop as a result of favorable rainfall. However, some farmers in irrigated areas of the central plains, (accounts for around 20 percent of total main rice crop cultivation in irrigated areas), still cannot plant their crops as the Royal Irrigation Department (RID) still has not supplied water for these areas. The RID’s crop-progress report on July 20, 2016 indicated that the planting of the MY2016/17 main rice crop in irrigated areas was behind last year’s pace. This planting delay of three months is likely to result in an acreage reduction for the MY2016/17 main rice crop around 2 million rai (0.3 million hectares), particularly in the central plains as a second crop is highly unlikely. According to the Thai Meteorological Department (TMD), cumulative precipitation increased to normal levels in July 2016, which is 30 percent higher than last year. However, the government still has not released water for agriculture irrigation purposes as water reservoir levels remain low. The RID reported that water supplies in major reservoirs in the northern regions, which are main sources of irrigated water supplies for rice planting in the lower northern region and central plains, remained low at around 2 billion cubic meters (as of July 22, 2016), compared to the ideal levels of 7 billion cubic meters. The TMD expects normal precipitation nationwide during August and September 2016, which is expected to help recharge reservoirs in the northern regions.

Post’s forecast for the MY2016/17 rice production remains unchanged at 17 million metric tons, which will likely increase 8 percent from MY2015/16. The increase is due to anticipated recovery of the off-season rice production to 3.2 million metric tons.

Rice exports revised up to 9 million metric tons in 2016

According to the Thai Rice Exporter Association, preliminary rice exports in June totaled approximately 650,000 metric tons, down 5 percent from the same period last year. This is mainly due to a reduction in white and parboiled rice exports resulting from tight domestic supplies of new-crop white rice paddy. Export prices for 5% grade white rice and parboiled rice increased significant to $420/MT and $460/MT respectively in June 2016, up approximately 10% from the same period last year. This has slowed exports of Thai rice to 11 percent (4.9 million metric tons) in the first half of 2016 compared to 14 percent in the first five months (4.3 million metric tons).

Post expects Thai rice exports in the second half of 2016 to increase primarily driven by the government’s aggressive sales of rice stocks for export, which is likely to more than offset the reduction in parboiled rice exports. The government issued a new tender for 3.8 million metric tons on July 25, 2016. The tender consisted of 2.9 million metric tons of food-grade rice, of which 2.2 million metric tons will be for export only and 0.7 million metric tons for the domestic or export market. Most of the stocks were 5% grade and broken white rice (A1-Super grade) from carry-over stocks under the MY2012/13 and MY2013/14 rice pledging programs. Presently, export prices of old-crop white rice are reportedly at $342/MT which is $75-80/MT lower than those of current-crop white rice. This price is reportedly competitive in African market as it is approximately 10 percent cheaper than Vietnamese rice. The remainder of around 0.9 million metric tons was non-food grade rice, which is anticipated to be used for the animal feed and ethanol industries.

Post revised up its Thai rice export estimates in 2016 to 9 million metric tons from the previous forecast. However, it is still 8 percent lower than the last year’s exports of 9.8 million metric tons due to tight new-crop rice supplies.

Rice, Milled

Market Begin Year

Thailand

2014/2015

2015/2016

2016/2017

Jan 2015

Jan 2016

Jan 2017

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

10270

10643

9444

9444

9550

9543

Beginning Stocks

11899

11899

10570

11207

6070

6807

Milled Production

18750

19404

15800

15800

17000

17000

Rough Production

28409

29400

23939

23939

25758

25758

Milling Rate (.9999)

6600

6600

6600

6600

6600

6600

MY Imports

300

300

300

300

250

300

TY Imports

300

300

300

300

250

300

TY Imp. from U.S.

3

0

0

0

0

0

Total Supply

30949

31603

26670

27307

23320

24107

MY Exports

9779

9796

9800

9000

9000

9000

TY Exports

9779

9796

9800

9000

9000

9000

Consumption and

10600

10600

10800

11500

11100

12500

Ending Stocks

10570

11207

6070

6807

3220

2607

Total Distribution

30949

31603

26670

27307

23320

24107