UPDATE 2-Floods may damage quarter of Thai rice crop, exports hit

Fri Oct 28, 2011 9:24am GMT
 

* Six mln T of paddy may be damaged in Thai flooding

* Thai prices seen climbing to $800-$850 a tonne

* Ample global supplies to prevent panic reaction (Recasts with details on Indonesia, quotes)

By Apornrath Phoonphongphiphat

BANGKOK, Oct 28 (Reuters) - - Thailand may lose a quarter of its main rice crop in the nation's worst flooding in decades, the government estimates, which could boost prices of the staple and further squeeze shipments from the world's top exporter.

The flood damage to rice comes at a time when Thailand, which accounts for about 30 percent of global trade, has in place an intervention scheme that is likely to push prices even higher, encouraging buyers to seek alternative origins.

A rally in the market for Asia's main staple could stoke tensions across a region where several nations are struggling with a double-digit increase in food inflation, although ample global reserves and new supplies in the pipeline are expected to keep buyers calm for now.

"The 6 million tonnes damage (to rice paddy) is just an initial estimate. We need to conduct a survey again after flood water recedes," Apichart Jongsakul, head of the Office of Agriculture Economy, told Reuters, adding that the figure, which is a 50 percent jump from early estimates, referred to the main crop.

As a result Thailand may not be able to meet its rice export commitments to Indonesia, the Indonesian trade minister said on Friday, forcing Southeast Asia's largest economy to explore other sources.   Continued...

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