Thai rice exports poised to hit 9 million tonnes amid climate anxieties

Thailand stands on the cusp of a hugely promising year in terms of rice exportation, which, forecasts suggest, could reach up to 9 million tonnes. Making the most of a climate-induced market fervour, the Thai industry gleefully anticipates shipping masses of what is an integral commodity to many. The increase in demand is believed to be rooted in anxieties about the potential fallout of the El Niño weather phenomenon.

Chookiat Ophaswongse, the honorary president of the Thai Rice Exporters Association, conveyed his optimism, suggesting the industry is primed to export around 4-5 million tonnes of rice in the latter half of this year, this is atop 4.1 million tonnes dispatched in the year’s first half. Chookiat said…

“The price of rice has increased to the highest level in 11 years.”

Specifically, the cost of free-on-board Thai white rice has surged to US$510 per tonne, equalling the price of Vietnamese rice. Contrastingly, Indian rice stands slightly cheaper at US$480 per tonne, having previously lagged behind Thai grains by up to US$100 per tonne.

According to Chookiat, uncertainties concerning El Niño led to notable fears last year, and this may have sparked a global reduction in rice supply. The aftermath was panic buying. Self-preservation took precedence as numerous countries have sought to bulk up their stocks to mitigate potential risks. Phrases like “rice-importing nations” and “increased stockpiles” became rather common.

In response to these industry developments, both the Philippines and Indonesia publicly announced intentions to increase their rice purchases. Indonesia has already added 1 million tonnes to its domestic supply.

An equal level of concern echoed in Malaysia, domestic production and stock dipping have prompted plans to import 1.2 million tonnes of rice. Inevitably, Malaysian rice prices have surged upwards by 10%, and it’s anticipated this hike will inspire further rice purchases from Thailand.

Meanwhile, the Philippines has secured a colossal 2 million tonnes of rice from Vietnam. The former shipped 4 million tonnes in the first five months of the year but has an annual export capacity of 7 million tonnes.

Chookiat also revealed that China had augmented its rice imports from Vietnam, confirming it had begun amassing rice stocks.

Looking back, Thailand exported 7.69 million tonnes of rice last year, a definitive 22% boost from 6.3 million tonnes in 2021. This upward trajectory was also visible in monetary terms: export value inflated by 25.1% to 138 billion baht (US$3.97 billion), marking a 14.6% rise.

The commendable performance positioned Thailand as the second-largest global rice exporter in 2022, second only to India (with exports totalling 21.9 million tonnes). Vietnam ranked third with exports of 6.31 million tonnes.

Significantly, Iraq emerged as the most prominent buyer of Thai rice, purchasing 1.6 million tonnes last year – a towering 458% surge from 2021. Other key importers included South Africa with 775,000 tonnes (a marginal drop of 2.26% from 2021), China with 750,000 tonnes (up 18.8%), the US with 650,000 tonnes (up 13.2%), and Benin with 321,000 tonnes (down 15.3%).

As the world keeps a cautious eye on El Niño, Chookiat warned about the monitoring of rainfall levels from July to September. Any dip during this period would pose a direct threat to main crop rice production, which is heavily reliant on rainfall.

Chookiat estimated that insufficient rainfall could cripple Thai rice production by 10-15% from the standard output level. Given that the usual annual production of the main crop paddy rice is 24 million tonnes and off-season periods produce 8 million tonnes, a tangible hit on production is a probable scenario, reported Bangkok Post.

With regard to the domestic scenario, Chookiat said…

“Regarding the government’s recent instruction to reduce off-season rice cultivation to reserve water resources in dams and prepare for a severe drought next year, we will have to wait and see. The price of unmilled rice is very favourable, with domestic prices reaching 11,000 baht per tonne, which may encourage farmers to continue cultivating off-season rice.”