Thai rice exports drop 58 per cent to 10-year low

Feb 6, 2012, 3:32 GMT

Bangkok - Thailand's rice exports dropped 58 per cent year-on-year in January, as the government's price-guarantee scheme cut into exporters' competitiveness, news reports said Monday.

The country shipped 387,748 tons of rice last month, the lowest level in a decade, The Nation newspaper reported.

Thailand, the world's leading rice exporter for the past five decades, shipped 10.5 million tons last year, but the kingdom is expected to ship only 6.5 to 7 million tons in 2012, according to the Thai Rice Exporters Association.

Rice exports have been on the decline since October, when the government began offering farmers fixed prices.

The policy, intended to boost farmers' incomes, comes at a time of falling rice prices on the world market due to India's re-entry into the international trade last year, and falling demand among many traditional rice-importing nations.

The global rice trade is expected to decline 5 per cent in 2012 due to falling demand in traditional rice importers such as Bangladesh, Indonesia, Nepal, Nigeria and the Philippines, according to the United Nation's Food and Agriculture Organization.

Last year's global rice exports reached a record 34.5 million tons but are expected to drop to 32.8 million tons in 2012, the organization estimates.