(Adds Chicago price in fifth paragraph.)
Jan. 31 (Bloomberg) -- Rice exports from Myanmar may more than double to 1.5 million metric tons this year, an industry group forecast, highlighting the country’s potential to boost overseas trade as its government pursues reform.
As the government starts to purchase production at above- market prices to encourage greater planting, shipments may increase to as much as 2 million tons next year and reach 3 million tons by 2015, according to the Myanmar Rice Industry Association. Sales totaled 700,000 tons in 2011.
An advance in exports may bolster global stockpiles, while boosting competition for Thailand, Vietnam and India. The projected gain may make Myanmar the world’s sixth-largest shipper this year, with volumes at the highest level since the 1960s, when the country was the world’s largest exporter, according to data from the U.S. Department of Agriculture.
“Myanmar coming into the market will take away some markets from Thailand, worsening Thai rice exports,” said Vichai Sriprasert, honorary president of Thai Rice Exporters Association. “In the long run, Myanmar has the potential to become the top exporter because of its fertile land and water.”
The price of 100 percent grade-B rice from Thailand, a benchmark variety from the largest exporter, plunged 18 percent from a three-year high in November to $546 per ton on Jan. 18. Rough rice traded on the Chicago Board of Trade, which was at $14.49 per 100 pounds at 5:33 p.m. in Singapore, has lost 2.5 percent this year. Prices have declined as India resumed exports of non-basmati rice after a four-year ban.
Myanmar has the potential to become the Asia’s “next economic frontier” if it takes advantage of its natural resources, young labor force and proximity to China and India, the International Monetary Fund said last week. The country, which shares borders with the world’s two most-populous nations, may grow 5.5 percent in 2011-2012, the IMF said.
Myanmar President Thein Sein has been releasing dissidents and engaging with the opposition, prompting the U.S. and Europe to reassess sanctions against the former military dictatorship. The country is the “most promising” Asian market as the government reforms the political system in a nation that has ample natural resources, investor Jim Rogers said in November.
While local consumption accounts for 11.5 million to 12 million tons per year, total milled-rice output may increase 11 percent to 13.5 million tons in the year that started in October, and climb to 15.5 million tons over the next three years, the association said in an e-mail. Target markets for white-rice sales are Africa, Indonesia and the Philippines, it said.
The increase in planting was driven by a government policy of buying rough rice at about 10 percent above the market rate, according to the association. The program started in about the middle of January, it said.
Global rice stockpiles may gain 3 percent to 100.1 million tons in 2011-2012, the highest level since the season ended 2003, as worldwide output increases 2.5 percent to a record 461.4 million tons, according to projections from the USDA.
Myanmar has agreed to sell 200,000 tons of white rice to Bulog, Indonesia’s state food agency, the association said in a separate statement on Jan. 29. That’ll be the first exports to Indonesia in more than 10 years, it said.
--Editors: Jake Lloyd-Smith, James Poole
MI RICE NI MYANMAR NI THAI NI INDIA NI INDO NI PHIL NI AGMARKET NI ASIA NI ASIAX NI CMD NI CMDMARKET NI CMDX NI CONS NI COS NI EM NI FBR NI FOD NI GRN NI MARKETS NI PHIL NI SEASIA NI VIET NI TRD NI AGR NI EXCLUSIVE
#<857020.3939722.214.171.124.14779.25># -0- Jan/31/2012 09:46 GMT
To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at email@example.com
To contact the editor responsible for this story: James Poole at firstname.lastname@example.org