Wednesday, September 25, 2013

Thailand Likely Will Struggle to Get Back to No. 1 in Rice Exports

Thailand Likely Will Struggle to Get Back to No. 1 in Rice Exports

           Thailand’s rice exports are growing. However, it is hard for Thailand to get back as the world’s No.1 exporter again. Analysts forecast that India will export 9 million tons of rice this year followed by Vietnam’s with 7.4 million tons and Thailand ranks 3rd with 6.5 million tons. Moreover analysts say that Vietnam will become to the first place very soon.
Thailand has some advantages. First, there have the demand for its longer-grain rice by buyers Iraq and Republic of Benin in West Africa. Another reason is that Thai government push to sell some of it stockpiled rice. 

         The Thai government wanted to boost the income of rice farmers two years ago. They bought rice at 50 percent prices above the market rates and shoveled it into storage sites while predicting that this would goose up market prices. But at that time India and Vietnam jumped in to the business with cheaper prices. That caused Thailand was left with excess supplies and debt from the costly subsidy program and storage costs.
         Thai rice exports have been on the rise due to a mix of import rules with two majors importers, in Iraq and import tariffs in Nigeria. Moreover, the government supported to sell some of its surplus rice at prices lower than its cost of purchase.


         Thailand’s rice exports rose 35% in July compared with year earlier to 675,064 metric tons, hitting a nine-month high as lower prices revived demand. Although The London-based International Grains Council has forecast Thailand’s rice exports will rise 23% to 8 million tons for all of 2014, it will not make Thailand get back on top. While India will retain it’s the first place as rice exporter this year, although the council forecasts a 13% decline in India’s rice exports in 2013 due to smaller demand from African countries.

            Thailand’s export boiled grades rice increased from 40,000 tons to 104,000 tons to Benin in the same month last year. India is also Thailand’s main competitor in the parboiled rice market. Thailand has narrowed the price gap between its parboiled rice and that of India.
            For the near future, Thailand should set its goal at shoving aside Vietnam.

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