Cumulative precipitation has increased to normal levels since July 2016, which is 13% above last year. Market year 2016-17 rice and corn crop conditions are good to excellent, the report said. Meanwhile, late supplies of irrigated water for the central plains likely will result in a slight reduction in main-rice production to 13.8 million tonnes as it is too late for cultivation, particularly in lower areas, due to the concern about possible flooding damage during the harvest in November. However, the FAS anticipates sufficient water supplies by the end of rainy season likely will result in some recovery of the market year 2016-17 off-season rice production to 3.2 million tonnes as expected in the previous forecast.
The Thai Custom Department said Thai rice exports in the first half of 2016 totaled around 5 million tonnes, up 12% from the same period last year, reflecting an increase in white rice exports totaling around 2.8 million tonnes, up 20% from the same period last year. Exports of white rice more than offset a reduction in parboiled rice, which declined around 14% from the same period last year due to tight supplies of new-crop white rice. The increase in white rice exports is driven by the sales of old-crop white rice from the government stocks, the report said. The government sold approximately 3.2 million tonnes out of total tenders of 8.4 million tonnes during January – July 2016, the report said.
The FAS said Thailand’s rice export estimate for 2016 has been revised upward to 9 million tonnes, but it is still 8% lower than last year’s exports of 9.8 million tonnes due to tight supplies of new-crop white and parboiled rice and competition from Vietnamese and Indian rice, particularly in the third quarter of 2016. Also, the government is likely to slow down its sales of food-grade rice stocks for the rest of 2016 to avoid downward pressure on domestic rice prices during the harvest of new-crop rice in the last quarter of 2016, the FAS said.
The Thai Feed Mill Association’s forecast of feed demand remains unchanged at 18.6 million tonnes in 2016, up approximately 4% from 2015. Feed industries rely more on imported feed ingredients, which currently account for approximately 60% of total feed demand due to insufficient locally produced feed grains and co-products. Import demand for U.S. feed ingredients is expected to trend upward, particularly for soybean and soybean meal, and Distiller’s Dry Grain with Soluble (DDGS), according to the report.
Thailand’s market year 2015-16 wheat imports were higher than expected at 4.7 million tonnes due to an increase in feed wheat imports to 3.3 million tonnes, the FAS noted in the report. The increase was driven by the shortages of domestic supplies of corn and broken rice for poultry and swine feed rations, the report said. In addition, prices of imported feed wheat were 18% cheaper than domestic corn and 30% cheaper than broken rice.
According to the FAS, Thailand’s market year 2015-16 corn exports were higher than expected at around 0.4 million tonnes, mainly to the Philippines due to the advantage on transportation costs over the U.S. corn. This is also driven by larger exportable supplies of locally produced corn as feed mills reportedly used more imported feed wheat and DDGS in poultry feed rations due to its relatively cheaper prices compared to domestic corn by 18% and 10% in market year 2015-16, respectively. In addition, demand for feed ingredients, particularly for corn, has outpaced domestic production of corn due to limited arable land and low incentives in using modern germplasm to locally develop high-yield seeds, compared to annual growth rate of 8% in feed demand over the past decade, the report said. As a result, imports of feed ingredients increased significantly in market year 2015-16, particularly for feed and DDGS for poultry and swine feed rations.