Tuesday, November 1, 2011

Floods may delay Thai rice exports up to a month-exporters

BANGKOK (Nov 1): Some Thai rice exporters that have been hit by flooding may not be able to resume shipments for another month and some might be obliged to declare force majeure if the situation gets worse, the Rice Exporters Association said on Tuesday.

However, as of now, no force majeure has been declared, industry officials said.

"We, especially exporters whose warehouses are located along the Chao Phraya river, have had to postpone for up to a month until the floodwater recedes, which could be somewhere around end-November," said Korbsook Iamsuri, head of the Thai Rice Exporters Association.

The Chao Phraya has been at record levels in Bangkok in recent days, overflowing its banks in places.

Bangkok port has been disrupted by the high water levels but some shippers have been able to use ports to the east such as Sri Chang and Laem Chabung, which are functioning well.

Korbsook said exporters who faced severe problems could ask for a certificate from the Thai Chamber of Commerce to declare force majeure.

But Wanlop Pitchpongsa, deputy managing director of Capital Rice, said: "We have just informed our clients that we have a problem with transportation and our shipping jobs could take around a month longer than expected, but there's no force majeure yet."

An official at the Thai Chamber of Commerce said it had not issued any certificates of force majeure to rice exporters.

Around 40 certificates had been issued to businesses, mostly food-processing companies and electrical parts producers whose factories were in flood-hit industrial zone in central Ayutthaya province.

The worst flooding in five decades has killed nearly 400 people since July and damaged up to 6 million tonnes of paddy from the main crop being harvested from this month, which could total 19 million tonnes rather than 25 million.

Indonesian state procurement agency Bulog said on Tuesday there had been no cancellation of Thai rice shipments despite the flooding and that 15,000 tonnes out of 150,000 tonnes in a commercial deal had been delivered.

Traders in Thailand said the shipment delays, added to uncompetitive prices and the return of India to the market, would cut Thai rice exports significantly in the final quarter of this year.

"Exports in October will definitely not look as good as the previous month as we face several problems," Korbsook said, expecting October exports to drop to around 500,000 tonnes from a more normal 800,000-900,000 tonnes.

Thailand shipped 427,000 tonnes from Oct. 1 to 18.

The world's biggest rice exporter has shipped 9.5 million tonnes so far this year, up from 6.6 million in the same period last year.

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