Thailand’s golden rice grain faces storm from strong baht and India

Thailand’s rice exports are teetering on the edge of crisis with looming threats from a strong baht and potential policy changes in India.

The Thai Rice Exporters Association has cast a shadow over next year’s outlook, predicting exports might flop below the eight million tonnes mark.

Chookiat Ophaswongse, the association’s honorary president, revealed the unsettling news despite unabated flooding wreaking havoc in the north and northeast.

This year’s exports, however, seem to be riding the storm, with hopes still high of surpassing the 8.2 million tonnes annual target. Should monthly exports hover around 600,000 tonnes, the total might even spike to nine million tonnes.

Enter Indonesia’s rice import agency, Bulog, which has been snapping up supplies through monthly tenders averaging about 450,000 tonnes.

Yet, Thai rice has been struggling to hit the bullseye on tender prices, losing out to more wallet-friendly options from Vietnam, Myanmar, and Pakistan. Thanks to La Niña’s generous rainfall, these countries have ramped up rice production, flooding the global market with supply.

Global rice prices

India, eyeing a grand comeback, might resume exporting white rice in the fourth quarter of the year. This move is set to stoke the competition, likely driving global rice prices into a nosedive and dragging down domestic prices in Thailand, the association warns.

The US Department of Agriculture’s crystal ball sees India reigning as the world’s top rice exporter by 2025 with a whopping 20 million tonnes on the move, with Thailand and Vietnam trailing far behind at 7.5 million each, and Pakistan at 5.6 million.

The association cautions that 2025 could hit a sour note for Thailand. With India’s export resurgence and a robust baht squeezing the market, Thai rice exports might plummet to a meagre seven to 7.5 million tonnes.

Deputy Commerce Minister Suchart Chomklin recently cracked open the Thai Rice Networking Forum 2024, a grand affair aimed at bolstering the local rice market and shoring up confidence amongst trading partners in Thailand’s rice policies.

Despite the stormy forecast, Thailand’s rice exports have been on an upward swing. In the first seven months of 2024, the nation shipped out 5.68 million tonnes, marking a 22% year-on-year boom and raking in a handsome 132 billion baht, up 51% from the previous year.

Bangkok Post reported the surge is fuelled by rice importers racing to fill their granaries in light of India’s export restrictions and the growing need for food security.