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BP: Exports surge ahead in volume



April 7, 1998


                                     



                                   RICE 

              Exports surge
              ahead in volume
              and value

              Concerns raised over impact of strong
              baht

              Woranuj Maneerungsee 

              Rice exports in the first quarter of the year rose sharply in terms
              of both volume and value, according to Pracha Charutrakulchai,
              director-general of Foreign Trade Department.

              He said the volume of exports surged by 73.5% to 1.84 million
              tons, while the value jumped 37.1% to US$576 million
              compared to the same period last year.

              In baht terms, the value increased dramatically to 26.9 billion
              baht, 147.6% more than the corresponding period in 1997.

              Mr Pracha said although rice exports for the first three months
              showed good earnings, the situation may change due to the
              strengthening of the baht. 

              In March, for example, when the baht improved against the US
              dollar, the country shipped 590,000 tons of rice generating 8.7
              billion baht while in February when the baht was weaker,
              Thailand shipped 560,000 tons earning 8.8 billion.

              "Rice exports will clearly show a reduction in the second quarter
              because several buyers in Asian countries, the largest Thai rice
              market, have faced liquidity problems," said Mr Pracha. 

              Some major buyers including the Philippines and Indonesia have
              delayed placing orders. Indonesia has even asked for a one
              million ton rice donation from Japan and the US to replace
              imports. 

              Amid the negative rice production situation, the director said
              Thai exporters may receive positive news if the volume of rice
              exports from rival countries like Pakistan and India fell and if
              Vietnam raised its prices.

              It is estimated that Thailand will export between 400,000 and
              500,000 tons a month during the second quarter. That would
              help absorb the 3.43 million tons of paddy output from the
              second crop which will be released to the market between April
              to May.

              Somboon Phataichan, manager of Rice Exporters Association
              added that although the volatile baht affected rice exporters, the
              impact would not be too great as orders are normally delivered
              almost immediately after pricing agreements are made. The
              speed of delivery reduces the time that the baht can strengthen or
              weaken.

              Mr Somboon is confident the country's exports will meet its
              target of 5.55 million tons this year. World rice trade for 1998 is
              expected to increase higher than earlier prediction of 19.28
              million tons to 22.75 million tons.

              The main rice importing countries are the Philippines, China, and
              Indonesia which faced the severe drought from the "El Nino"
              phenomenon.

              In a related development, Mr Somboon said the price of local
              paddy rice has declined as a result of the stronger baht.

              Fragrant paddy has fallen to around 8,500 baht a ton from
              10,000-12,000 baht in December-January. Also, white paddy
              rice dropped to 6,000-6,400 baht a ton from 8,000-8,500 baht.

              The fall of paddy rice price has also pushed down local prices.
              According to Internal Trade Department, price of a five-kilo bag
              of rice has fallen by 13.4%. 




                                     




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Last Modified: Tue, Apr 7, 1998