Global Rice Outlook: Thailand Focus
BMI View: We continue to believe Thailand's rice production will recover in 2013/14 after 2012/13's disappointing crop, but have revised down our estimate due to lower plantings in the off-season crop. In 2014/15, we see output declining due to the abandonment of the government's rice pledging scheme and to inclement weather ahead of the main crop's planting season. The government is stepping up efforts to dispose of ballooning inventories and a resulting recovery in Thai exports, coupled with favourable output outlook in other suppliers, bolsters our view for global rice prices to average lower in 2014 and 2015.
We have revised down our estimate for Thailand's rice production in the 2013/14 season. The drier than normal weather recorded in Thailand since the end of 2013 will decrease yields of the secondary 2013/14 crop, the plantings for which have already been hit by the scaling back of the rice subsidies. We now see output recovering by a milder 1.1% year-on-year, to 20.4mn tonners (compared with previous estimate of 20.6mn tonnes). Looking at the 2014/15 season starting in October 2014 with the harvest of the main crop, we see output declining by 1.6% y-o-y to 20.1mn tonnes. The weather remains dry ahead of the planting season, which may hamper sowing conditions. Moreover, uncertainties surrounding the government's domestic support programs and delays in some farmers' payments for the current season will weight on planting intentions. Area harvested is likely to stagnate, at best, around 2013/14's levels of 10.9mn ha.
Growing Global Supply With The Pickup In Thai Exports
|Averaging Lower In 2014|
|Second-Month CBOT Rough Rice, USD/cwt (Weekly Chart)|