Thailand, set to be the world's biggest rice exporter this year, may harvest a record crop as a government plan to lift farm income boosted planting, the office of agricultural economics said yesterday.
Production of unmilled rice in the year started October will increase 9.4 per cent to 37.9 million tonnes from a year earlier, while planting area expanded 0.8 per cent to 12.6 million hectares, the office said.
"Attractive prices motivated farmers to increase plantings, boosting production to a record," said Apichart Jongskul, the secretary-general of the office. Drought may cut production in some areas but farmers will replant to make up for potential losses, he said.
The main harvest, accounting for 69 per cent of annual output, will rise 12.6 per cent to 26.2 million tonnes, while production from the second crop may add 11.7 million tonnes.
Higher production of the staple for half the world may curb prices in Chicago as inventories tracked by the United Nations' food and agriculture organisation swell to a record 169.8 million tonnes.
World output of milled rice in 2012 to 2013 is forecast at an all-time high of 465.3 million tonnes, according to the US department of agriculture. Thailand started buying rough rice from farmers at above market rates in October last year, to lift domestic prices and rural incomes.
Rough rice for delivery next month was little changed at US$15.41 per 100lbs on the Chicago board of trade in late afternoon trading in Singapore.
While futures have climbed 3.7 per cent this year, they are 17 per cent below a three-year high of $18.54 reached in September last year.
Thailand will export 8 million tonnes of milled rice in 2012 to 2013, according to the US agriculture department, surpassing last year's top shippers India and Vietnam.
Meanwhile, the Philippines may drop a plan to buy 100,000 tonnes of rice next year after forecasts of good local supply, the country's agriculture minister said yesterday, in a move that could help keep down global prices of the grain.
The South East Asian country, which buys most of its rice imports from neighbouring Vietnam, is aiming to become self-sufficient in rice by the end of next year and the agriculture department said Manila was reviewing the purchase plan.
"We have to review that," said Proceso Alcala, the Philippine agriculture secretary.
"Our production is very strong.
"I think only bad weather will be the hindrance for us to become self-sufficient," he said, adding the Philippines could even start exporting some of its special rice varieties next year to the UAE and the United States.
* with Bloomberg News