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MY 2014/15 Rice, Corn Production Forecast to Drop

17 March 2014
USDA Foreign Agricultural Service

THAILAND - Marketing Year (MY) 2014/15 rice and corn production is forecast to decline two to three per cent from the previous year in anticipation of below normal average precipitation which will likely affect yields and water supplies for the off-season crops.

In addition, the uncertainty of whether the government will continue its domestic support programmes, particularly, the rice paddy pledging programme, will likely limit any acreage expansion. Meanwhile, corn farmers are likely to shift to planting cassava as current corn prices have dropped significantly.

The suspension of the MY2013/14 Off-Season Rice Paddy Pledging Programme and the continued sales of the government rice stocks have put downward pressure on domestic rice prices, which has made Thai rice more competitive with Vietnamese and Indian rice. Exports of Thai rice will likely rebound to 9-10 million metric tons in 2014 and 2015, particularly for white and parboiled rice.

The reduction in domestic prices for broken rice and corn will support the growing livestock sector. Thailand’s feed demand is expected to increase by five to six per cent in 2014 driven by chicken meat exports. The substitution of imported feed wheat for corn and broken rice in poultry and swine feed is likely to decline.

However, import demand for milling wheat is forecast to continue its upward trend in MY2013/14 and MY2014/15 driven largely by an increase in the milling capacity of large mills in line with growing demand from the baking and food processing industries. Feed wheat consumption is also likely to increase slightly in MY2014/15 in anticipation of a gradual recovery of the shrimp industry.

Rice stocks will likely continue to decline in MY2013/14 and MY2014/15 due to the acceleration of the government’s sales of rice stocks, which it needs to finance the MY2013/14 Main-Crop Rice Paddy Pledging Programme. Post estimates total rice stocks to decline to around 13 million metric tons by the end of MY2014/15, of which 60 to 70 per cent is expected to be the government stocks.

Further Reading

You can view the USDA GAIN: Thailand Grain and Feed Annual 2014 report by clicking here.

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