BANGKOK — Thailand is set to overtake India as the world's largest rice exporter as the nation accelerates sales from state stockpiles, adding to record global supplies, according to the International Rice Research Institute.
Shipments from India may drop to as low as 7 million metric tons in the year that began Oct. 1, said Samarendu Mohanty, a senior economist. Exports including the aromatic basmati variety more than tripled to 10.4 million tons the previous year, said the U.S. Department of Agriculture. Thailand plans to ship 8.5 million tons in 2013 from 7.3 million tons this year, according to the Department of Foreign Trade.
Rising Thai supplies may increase competition among Asian producers and pressure prices that have risen 1 percent in Chicago this year. A decline in the staple for half the world may further lower food costs that the United Nations' Food and Agriculture Organization estimates dropped 0.9 percent in October from a six-month high. Global opening stockpiles for 2012-2013 will climb to the highest in a decade, the USDA says.
"Thailand has little choice but to release stocks and that will probably lead to lower prices," Concepcion Calpe, a senior economist at the FAO, said from Rome. "There will be growing competition from less important rice-supplying countries, such as Brazil, Russia, Egypt and Australia in the export markets, which will tend to reduce prices in 2013."
Thailand's stockpiles are poised to climb to a record 12.1 million tons by the end of 2012-2013 from 9.8 million tons a year earlier, the USDA estimates. The country will be forced to sell some of the rice it bought from farmers to make space for the new harvest, said Mohanty.
"High stockpiles may force Thailand to sell rice at a cheaper rate in the global market," Mohanty said. "The world market is already flooded with rice and if Thailand sells below cost, that will weaken prices further."