Required Report - public distribution

**Date:** 4/2/2004

**GAIN Report Number:** TH4040

TH4040

**Thailand**

**Grain and Feed**

**Update PSD Rice**

**2004**

**Approved by:**

![](media/image1.wmf)Rodrick McSherry, Agricultural Counselor

U.S. Embassy, Bangkok

**Prepared by:**

Ponnarong Prasertsri, Agricultural Specialist

**Report Highlights:**

MY 2003 rice exports are revised upward to 8.5 million metric tons, up
considerably from the record 7.6 million ton of the previous year.
Export demand is reportedly strong as Thailand is now a reliable source
of supply, as compared to the relatively cheaper rice from Vietnam and
India.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Bangkok \[TH1\]

\[TH\]

+------------------+-------+-------+-------+-------+-------+-------+
| **PSD Table**    |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| **Country**      | **    |       |       |       |       |       |
|                  | Thail |       |       |       |       |       |
|                  | and** |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**    | **    |       |       |       | (1000 |       |
|                  | Rice, |       |       |       | HA)   |       |
|                  | Mil   |       |       |       | (1000 |       |
|                  | led** |       |       |       | MT)   |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | 2002  |       | 2003  |       | 2004  |       |
|                  |       |       |       |       |       |       |
|                  | Re    |       | Est   |       | For   |       |
|                  | vised |       | imate |       | ecast |       |
+------------------+-------+-------+-------+-------+-------+-------+
|                  | USDA  | Post  | USDA  | Post  | USDA  | Post  |
|                  | Off   | Est   | Off   | Est   | Off   | Est   |
|                  | icial | imate | icial | imate | icial | imate |
|                  | \[    | \[    | \[    | \[    | \[    | \[    |
|                  | Old\] | New\] | Old\] | New\] | Old\] | New\] |
+------------------+-------+-------+-------+-------+-------+-------+
| **Market Year    |       | 01    |       | 01    |       | 01    |
| Begin**          |       | /2003 |       | /2004 |       | /2005 |
+------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested   | 9990  | 10158 | 10300 | 10636 | 0     | 10670 |
+------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks | 2401  | 2477  | 2051  | 2156  | 901   | 1156  |
+------------------+-------+-------+-------+-------+-------+-------+
| Milled           | 17124 | 17198 | 17800 | 17700 | 0     | 17900 |
| Production       |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Rough Production | 25945 | 26058 | 26970 | 26818 | 0     | 27121 |
+------------------+-------+-------+-------+-------+-------+-------+
| MILLING RATE     | 6600  | 6600  | 6600  | 6600  | 0     | 6600  |
| (.9999)          |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Imports    | 0     | 0     | 0     | 0     | 0     | 0     |
+------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Imports  | 0     | 0     | 0     | 0     | 0     | 0     |
+------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Import   | 0     | 0     | 0     | 0     | 0     | 0     |
| U.S.             |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY     | 19525 | 19675 | 19851 | 19856 | 901   | 19056 |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Exports    | 7552  | 7597  | 8750  | 8500  | 0     | 7800  |
+------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Exports  | 7552  | 7597  | 8750  | 8500  | 0     | 7800  |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.       | 9922  | 9922  | 10200 | 10200 | 0     | 10400 |
| Consumption      |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks    | 2051  | 2156  | 901   | 1156  | 0     | 856   |
+------------------+-------+-------+-------+-------+-------+-------+
| TOTAL            | 19525 | 19675 | 19851 | 19856 | 0     | 19056 |
| DISTRIBUTION     |       |       |       |       |       |       |
+------------------+-------+-------+-------+-------+-------+-------+

MY 2003 rice exports are revised upward to match the recent official
target of 8.5 million metric tons, up considerably from the previous
year's record 7.6 million metric tons, due to the anticipated aggressive
demand from buyers who can not secure rice from Vietnam and India,
Thailand's major competitors. Trade sources expect that exports should
increase significantly in the first half of the year, as the supply
situation among the major competitors is so tight that many foreign
buyers are shifting to Thailand as a reliable source of supply.
Moreover, China is reportedly expected to buy a significant amount of
white rice on top of its regular annual demand (mostly for fragrant
rice) of around 230,000 -- 270,000 metric tons in recent years. Lastly,
trade sources anticipate strong demand from South American countries, in
particular Brazil, for the second consecutive year. However, they remain
cautious about the current price surge to the five-year high of around
US\$ 260/ton (100% B grade white rice), FOB. This price spike has been
partly caused by China's aggressive demand for white rice starting in
February 2004. This sharp increase in price is also due to the
temporarily tight exportable supply, as the Thai government suspended
its rice stock sales to exporters until May 2004 while an investigation
into the corruption in the government intervention program. As a result,
some exporters are reportedly taking losses from short positions.
However, the overall supply situation of the second crop, now available
in the market, is reportedly favorable, despite relatively lower levels
of water, as compared to the previous year.