Rice-rumble rocks markets: Thailand anticipates 15% export dip, global repercussions loom

In a rice-rumble that could shake global markets, Thailand’s rice exports are poised to plunge by a staggering 15% this year.

Thailand, the rice heavyweight, is set to face a double whammy. Chookiat Ophaswongse, the honorary president of the Thai Rice Exporters Association, predicts a dip in demand from Indonesia, last year’s top buyer.

“Indonesia, after its presidential election next month, will likely cool its rice purchases.”

The rollercoaster ride of the Thai baht might also throw a spanner in the rice-export works, putting Thailand at a disadvantage against its rice rival, Vietnam.

Last year saw Thai rice shipments soaring to a five-year pinnacle at around 8.8 million tonnes. However, Indonesia, despite recent increases in imports, is expected to hit the brakes post-election, Chookiat said.

“The baht is also very volatile, making our prices uncompetitive, while Vietnam’s new crop is looking good.”

Thai white rice, a 5% broken Asian benchmark, saw prices skyrocketing to a jaw-dropping 15-year high in December. Why? India, a top rice player, put a leash on exports, and dry weather threw a curveball at production. Countries rushed to stockpile in fear of El Niño’s tightening grip on supplies, reported Bangkok Post.

Vietnam is stepping up to the plate! With the winter-spring crop expected to hit the harvest in February and March, prices are predicted to drop, drawing back buyers like the Philippines, Chookiat added.

“Vietnam’s new crop will help bring prices down in that country and lure back buyers.”

Post an election anticipated by May, Indian supplies could flood the market, easing global supply concerns. Chookiat predicts that India is likely to maintain export bans in the first half of this year, however, if they are revoked potentially in the second half, global rice prices will immediately drop.

In related news, Thai rice finds itself in a perilous position as the purity of its strains is at risk due to the rising popularity of foreign rice strains smuggled from neighbouring countries, warns the nation’s agriculture minister, Thammanat Prompow.