NEW DELHI: India and Thailand are caught in a race for the top slot in farm exports from southeast Asia. India has pipped Thailand to become the top rice exporter but the latter has won the day in sugar exports.

For the first time in four years, India has overtaken Thailand in rice exports. According to industry estimates, India exported 2.3 million tonne of rice including basmati between October 2011 and January 2012 while Thailand could export around 2 million tonne during the period.

But Thailand, the second largest exporter after Brazil, shipped 6.68 million tonne sugar in 2011 while Indian sugar exporters have been allowed to export only 2 million tonne till now.

India has always had a price advantage over Thailand, which sells at a premium in the world market. Last year, the export price of Thai rice ranged between $525 and $575 per tonne. But this year, the price swelled to $660 tonne on the back of the Thai government's high support price to farmers. The government paid farmers 15,000 baht a tonne for 100% white paddy and 20,000 baht for fragrant paddy to fulfill its election promise. This raised the export price of Thai rice, making it non-competitive in global markets. India recently raised its export quota of non-basmati rice from 2 million tonne to 4 million tonne to boost exports further.

"Rice-importing countries got a good alternative in India to expensive Thai varieties. While Indian rice costs $500-$530 per tonne, Thai rice costs $660 per tonne. This has led a surge in demand from countries like Indonesia and other African countries," said Om Prakash Arora, president Punjab-Haryana Rice Broker Association.

The rise in exports is supported by the expected bumper production of rice this year. The estimated record output of 102 million tonne allows the government to shed worries on food security. Besides, high inventories of more than 30 million tonne paves the way for smooth exports. The economical Indian rice is making inroads into major Thai markets such as Africa, Indonesia, Malaysia, Bangladesh and Nepal.

"We are getting good demand from overseas markets. We will cross the 3.5-million tonne mark this year. We expect to gain momentum in basmati once a formal order is issued on lowering the floor price from $900 to $700," said Vijay Setia, president, All-India Rice Exporters Association. However, India is way behind Thailand in sugar shipment. A good crop and a buoyant overseas demand keep Thai sugar steady in the global market.

According to media reports, about 33 million tonne of cane have been crushed since the season started in mid-November in Thailand, with around 2.3 million tonne of raw sugar and around 913,000 tonne of white sugar produced till now.

India is struggling to export one million tonne even as the government has further allowed the export of an additional one million tonne. Indian millers expect to produce 26 million tonne of sugar in 2011-12 while sugarcane production is likely to stand at 347.87 million tonne - higher by 5.09 million tonne over the previous year.

"We have given a release order for over 9.9 lakh tonne. But we are not sure about their physical delivery. The release orders have to be consumed within 60 days. Given the capacity of our ports, we don't think we will able to export more than 3 lakh sugar a month. This poses a big question mark over the second tranche of 1 million tonne," said a sugar directorate official.

source: ET

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