Thai rice exporters are signalling that exports of their produce will fall, triggering changes in demand in where it is shipped to.
“Since Thai rice prices are still higher than our competitors [Vietnam and India] the demand from both Asia and Africa is moving to the countries where rice is cheaper,” Sermsak Kuonsongtum, vice-president of the Thai Rice Exporters Association, told IHS Maritime. “This makes our estimated export figure go down to 8.0-8.5 million tonnes.”
Last year, Thailand exported about 11 million tonnes of rice, making it the world’s biggest rice exporter.
A big factor for the projected decline is the increasing cost of Thai rice due to the strong baht.
“The key factor to driving the export volume is the price, as history has proved that the difference of the prices influence buyers more than the difference in the quality,” Sermsak said.
India looks set to rival Thailand this year. Thailand exported 2.6 million tonnes of rice during the first four months of the year, only fractionally ahead of India’s export of 2.5 million tonnes.
Some countries managed to sell their rice up to USD40/tonne cheaper than Thailand’s. India, in particular, is helped by its government schemes to boost rice exports and its rice costs about USD360/tonne.
Thai rice costs USD385/tonne while Vietnamese rice costs USD355-360/tonne.