The outlook for Thailand's rice production remains positive although a drought may halve output of the last part of the second crop ending in August to as little as 2 million tonnes.
The Office of Agricultural Economics (OAE) remains sure that output would top 32 million tonnes of paddy this year, 23 million tonnes from the main crop and 9 million from the second, said Apichart Jongskul, secretary-general of the Agriculture Ministry's agency.
The projected output would translate into 21 million tonnes of milled rice.
Chanchai Rakthananon, president of the Thai Rice Mills Association, said output for the second cycle of the second crop, ending in August, could fall to as little as 2 million tonnes from the 4 million harvested in the same season last year, and against a previous forecast of 5 million.
As a result, total output for the entire second crop is estimated at just 5 million tonnes of paddy this year, he said.
Thailand can grow second-crop rice for more than one cycle, with certain watershed areas mostly in the well-irrigated central region able to achieve two or more cycles.
The first cycle second-crop harvest ending in early April was slightly affected by a water shortfall, producing an estimated 3 million tonnes of paddy.
Mr Apichart also said the price outlook for rice was weak, as output remains high compared with 31.65 million tonnes in the previous season, and new purchase orders remain sluggish.
Thai rice prices, the benchmark for Asia, fell 1.5% to the lowest level in two years as a weakening baht makes export prices cheaper and import demand subsides, the Thai Rice Exporters Association said.
The price of 100% grade-B white rice dropped to $469 a tonne from $476 a tonne on June 2.
Association president Korbsook Iamsuri said rice exports for the first five months fell by 5.15% to 3.38 million tonnes compared with 3.56 million in the same period last year.
Last month alone, volume declined by 18% year-on-year to only 660,000 tonnes.
''The situation in the global rice market remains inactive, as the world's leading rice traders are mostly based in Europe which is now hard hit by the debt crisis and the falling euro,'' said Ms Korbsook.
Source : Bangkok Post