NUSA DUA Thai rice exports in 2013 could drop below the 6.5 million tonnes touted for this year if the country's government persists with its policy of aggressively intervening in markets to boost domestic prices, the head of an industry body said on Thursday.
That could mean the nation would lose its spot as the world's top exporter of the grain, potentially trailing behind Vietnam and India, which are expected to export 7.2 and 7.0 million tonnes respectively next year.
"If the government continues its intervention policy, exports would definitely fall further because of our high prices and it would get worse next year," Korbsook Iamsuri, president of the Thai Rice Exporter Association told Reuters.
The Southeast Asian nation has been paying higher-than-market prices to farmers in a bid to support local rice growers -- a move that has also pushed up Thai rice prices to uncompetitively high levels.
Speaking on the sidelines of a conference, Korbsook left the forecast for 2012 exports at 6.5 million tonnes and said they would decline the following year if intervention continued, although she did not specify by how much.
Traders and industry officials at the event in Bali, Indonesia, said they expected Thailand to export 5-6 million tonnes in 2013 if the government persisted with intervention.
Some traders added that they were sceptical the scheme would continue because of its expense, however, with the government expected to decide within the next week whether the current round of intervention, due to expire on Sept 30, would be extended.
The Thai government started intervening in October 2011, paying farmers 15,000 Thai baht per tonne of paddy and pushing the country's export prices to nearly $200 per tonne higher than its competitors.
The commerce minister has said the government could spend another 405 billion baht ($13.1 billion) on top of the 280 billion baht used so far.
But analysts say this is unlikely as it would dwarf the 300 billion baht total budget deficit the government expects for the 2013 fiscal year.
Besides its huge cost, intervention has also driven government rice stocks to record highs, with the country desperate to offload large amounts.
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