WASHINGTON, D.C., U.S. — Thailand’s rice production forecast for market year 2016-17 remains unchanged at 17 million tonnes, which is an 8% increase from market year 2015-16 as recovery is anticipated in off-season rice production (3.2 million tonnes), the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in a July 1 report. The improved offseason conditions are expected to offset a reduction in the main-crop rice production which is expected to decline to 13.8 million tonnes due to the planting delays.

The government issued four tenders totaling 4.6 million tonnes from January-June,  2016. It has reportedly sold around 2.8 million tonnes. The government reported that it is still holding rice stocks of around 9 million tonnes, which consist of 3 million tonnes of food-grade rice and 6 million tonnes of industrial grade rice (including food processing and feed industries).

Thailand announced that it expects to issue a new tender for 2.2 million tonnes of foodgrade rice on July 25. This tender will be contingent for export only as eligible bidders are required to have export orders from their foreign buyers. The tender will mainly consist of 5% grade white rice and broken white rice (A1 Super grade) from carry-over stocks under the market year 2012-13 and market year 2013-14 pledging program. Presently, export prices of old-crop rice are 15%-20% cheaper than current crop. In addition to the tender above, the government expects an additional tender for industrial grade rice of around 400,000 tonnes on the same day.

Thailand’s Ministry of Commerce reported that its rice exports totaled 700,000 tonnes in May, down 23% from the same period last year. This is mainly due to a reduction in exports of white (26%) and parboiled rice (35%), resulting from tight supplies of new-crop white rice paddy. Export prices for 5% grade white increased significantly to around $400 per tonne in May compared to average export prices of $370 per tonne in the first four months of 2016. This has slowed the export of Thai rice to 14% (4.3 million tonnes) in the first five months of 2016 compared to 26% in the first four months (3.6 million tonnes). Exporters expect further reduction in rice exports in June and July as foreign buyers are reportedly limiting their purchases while the government aggressively sells its stocks.