Rice prices skyrocket in Thailand due to drought effects and export ban

A meeting is set to be convened today by Commerce Minister Jurin Laksanawisit evaluating the repercussions of the drought instigated by the El Niño weather occurrence, and potential courses of action in response to the surge in rice prices. Concurrently, the Commerce Ministry under the watchful eyes of Wattanasak Sur-iam, chief of the Internal Trade Department, is monitoring good prices, with agricultural products of particular interest due to the effects of the drought.

“The price of bagged rice remains normal, despite recent news about a rise in rice prices following India’s ban on exporting non-basmati white rice and the drought reducing production.”

Wattanasak also mentioned that the price of a 5-kilogramme bag of Thai hom mali rice averages 210 baht, while 100% white rice is priced at 117 baht per kilogram.

Several notable shopping centres are offering promotional discounts which reduce the prices of hom mali rice to around 165 baht in particular districts. Even though Wattanasak noted an increase in domestic prices, his department does not predict a significant impact on bagged rice prices.

Upon comparison with prices from the previous year, domestic prices of hom mali paddy are reportedly higher, from 14,499 baht to 15,000 baht per tonne and the price of white rice paddy has increased from 9,217 baht to 11,150 baht per tonne.

Meanwhile, Chookiat Ophaswongse, patrimonial president of the Thai Rice Exporters Association, stated the shipping industry is experiencing stagnation due to rising global prices and doubts brewing with India’s embargo on non-basmati white rice export. Chookiat explained that this action by India led to an escalation of domestic rice prices in Thailand.

For instance, the price of 5% white rice surged from 17,000 baht per tonne last week to 19,500 baht, while the price of white rice paddy climbed from 11,000 baht a tonne to 12,500 to 13,000 baht. The free-on-board price of 5% white rice is now at an equal level to Vietnamese rice at US$600 per tonne, reported Bangkok Post. Chookiat said…

“It is projected that the price of 5% white rice might cross the 20,000 baht per tonne mark this week, and additional increases are possible in the forthcoming 1 to 2 months.”

The escalating prices led to the aforementioned rice mills, which had promised exporters the delivery of rice ahead of the ban enforced by India, stating their inability to fulfil these promises. As prices are feared to rise further, rice importers expedited the shipping process to receive the rice.

Chookiat elucidated the trader’s predicament, echoing the recent struggles faced by exporters procuring rice in the current market.

“Rice exporters now face difficulties in procuring rice for delivery, and some of them have requested delays in shipment because of the challenging market conditions.”

Speculations abound on whether India would consider selling rice in the event of a request for humanitarian reasons or food security. Chookiat added…

“If the Philippines initiates a request for 1 million tonnes of rice, it remains to be seen how India would respond in terms of quantity and price.”

However, this precarious situation may take a favourable turn once India provides clarity on its export policy, as expressed by Chookiat.