BANGKOK: Rice stockpiles in Thailand, once the world's biggest exporter, are expanding to a record as a government programme to buy production spurs farmers to plant the most crops ever and add to a global glut.
Reserves in Thailand will increase 24 per cent to 15.5 million tonnes in 2013-2014 as global output rises 1.7 per cent to an all-time high of 476.8 million tonnes, the United States Department of Agriculture (USDA) estimates.
The price of five-per cent broken Thai white rice, an Asian benchmark, will drop 12 per cent to US$390 (RM1,240) a tonne by April, a five-year low, according to the median of eight trader and analyst estimates compiled by Bloomberg.
Thailand spent US$21.6 billion since October 2011 buying at above-market prices to shore up growers' incomes, creating a stockpile large enough to meet annual demand from the eight biggest importers and still have grain to spare.
The global supply of rice, a staple for half the world, is expanding| just as farmers reap record amounts of everything from corn to wheat, driving global food costs to a three-year low.
"I've rented more land, expanding farms by more than double, to reap the benefit of good prices from selling padi to the government," said Uthai Thongsaensuk, a 45-year-old farmer in the northeastern Thai province of Udon Thani.
"My friends also boosted plantings as we earn more."
Thai rice prices fell 24 per cent to US$445 this year as the Standard & Poor's GSCI Agriculture Index of eight commodities slumped 17 per cent, heading for its worst year since 2008.
Thailand will spend 270 billion baht (RM27.35 billion) buying rice from the harvest that started this month, reversing an earlier plan to cut prices after farmers threatened to protest.
Thai output will gain 4.5 per cent to 21.1 million tonnes in 2013-2014, the USDA says.
Stockpiles in India, Vietnam, Thailand, the US and Pakistan, the five largest shippers, will expand 6.8 per cent to a record 42.6 million tonnes in 2013-2014, said Darren Cooper, a senior economist at the London-based International Grains Council. Bloomberg