Strong baht and more competition from India expected to affect sales
18 Sep 2024, Phusadee Aru.
Thailand’s rice exports are likely to total less than 8 million tonnes next year based on a host of risk factors hampering their competitiveness, such as the strong baht and the possibility of India lifting its export restrictions at year-end.
https://www.bangkokpost.com/business/general/2867916/thai-rice-exports-forecast-to-fall-next-year
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said that despite persistent flooding in the North and Northeast, it should not affect rice exports this year.
The association expects Thailand will exceed its annual export target of 8.2 million tonnes this year, and if exports average 600,000 tonnes per month the remainder of the year, the tally could reach 9 million tonnes.
Bulog, Indonesia’s rice import agency, has been holding monthly tenders for rice imports, averaging around 450,000 tonnes per month.
However, Thai rice prices failed to meet their target tender prices, as rice from Vietnam, Myanmar and Pakistan is cheaper than Thai rice, leading to more orders for the three competitors.
Rice production in Vietnam, India, Pakistan and Myanmar has improved because of adequate rainfall during the La Niña weather phenomenon, increasing rice in the global market.
Moreover, India signalled a return to exporting white rice in the fourth quarter of this year, competing for market share and likely driving down global rice prices, which could lower Thai domestic rice prices as well, according to the association.
The US Department of Agriculture projects India will remain the largest rice exporter globally in 2025, with shipments anticipated to reach 20 million tonnes, followed by Thailand (7.5 million), Vietnam (7.5 million) and Pakistan (5.6 million).
The association warned of a tough year in 2025 as India will likely resume rice exports, returning to the top spot, coupled with a stronger baht, which may cause Thai rice exports to decrease to between 7 million and 7.5 million tonnes.
Deputy Commerce Minister Suchart Chomklin chaired the opening ceremony of the Thai Rice Networking Forum 2024 this week, promoting the local rice market and increasing confidence among trading partners regarding Thailand’s policies for the development of rice and rice products.
Thailand’s rice exports have been on a positive trend. In the first seven months of 2024, the country exported 5.68 million tonnes of rice, up 22% year-on-year.
The surge generated 132 billion baht in revenue, up 51% year-on-year.
The growth was driven by rice importers seeking to secure grains for both consumption and stockpiling for food security, coupled with India’s continued export restrictions.