Weaker competitiveness, drought and changing market demand could see Thailand lose its place as the world’s second-biggest exporter of rice this year. Higher production costs compared to rivals, and volatile foreign exchange rates mean Thailand risks losing out to Vietnam, according to Charoen Laothamatas, president of the Thai Rice Exporters Association.
“Thailand has shipped the same rice varieties for 30 years and lacks rice variety development to deal with changing market demand and consumer behaviour. This year, the association has set a rice export target of 7.5 million tonnes, the same target as the Commerce Ministry, worth US$4.2 billion.”
That target is the lowest in seven years: in 2013, Thailand exported 6.6 million tonnes of rice. The kingdom shipped 7.6 million tonnes in 2019, fetching 131 billion baht, down 32% and 25% respectively.
Perhaps surprisingly the biggest export market last year was the west African country of Benin, which imported over a million tonnes of Thai rice, followed by South Africa with 725,461 tonnes, the US with 559,957 tonnes and China at 471,339.
Chookiat Ophaswongse, honorary president of the association, says key risk factors for Thailand’s rice export outlook include the strong baht, widespread drought, China’s huge stocks (120 million tonnes) and continued development of new varieties in Vietnam, especially fragrant rice and soft-textured white rice. Vietnam has managed to export rice at lower prices than Thailand and tap key rice markets like China, Hong Kong, the Philippines and Malaysia.
Other risk factors include the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which would let Vietnam expand export markets. But The COVID-19 coronavirus outbreak is expected to make rice consumers, particularly China, Hong Kong and Singapore, raise their stocks. Indonesia is planning to raise its rice imports to about a million tonnes, up from 300,000 tonnes last year.
“The virus outbreak has created a panic in China, Hong Kong and Singapore, increasing their demand for rice. But even with an upsurge in demand, it will be difficult to achieve the export target of 7.5 million tonnes.”
SOURCE: Bangkok Post
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