High Thai rice prices may send buyers elsewhere

A rise in domestic prices and stiff global competition took their toll on rice exports from Thailand in February, with total volume falling 20% year-on-year and declining monthly for the fourth month in a row.Vichai Sriprasert, the president of the Rice Exporters Association, said government market intervention had distorted market prices by offering high pledging rates for 2004-2005 paddy, which has in turn pushed up prices for rice exports, making them less competitive in the global marketplace
Vietnam generally ships most of its 3.5 million to 3.8 million tonnes of rice export volume early in the year. Therefore, wise buyers generally buy inferior rice grades, anywhere from 10-25%, from this market due to its more competitive prices.
According to the Foreign Trade Department, the world's rice supply for 2004/2005 will be 402.1 million tonnes, far less than demand, which has been pegged at 411.1 million tonnes.