Global Rice News

Thai Rice Export Market Faces Challenges

Recently, the Thai rice export market has encountered various challenges. Previously, there were significant orders for Thai rice, which drove domestic and export rice prices up. The average price for 5% white rice, Thailand’s most exported type, was around US$649 and $630 per ton in May and June respectively. However, the situation has changed in the third quarter.

In the first half of this year, Thai rice exporters managed to export approximately 5 million tons of rice. The intense competition among exporters to buy rice for export drove domestic prices up. However, new orders have become scarce due to the higher prices of Thai rice compared to competitors. As a result, the third quarter has been quiet across all markets.

Furthermore, rice production in competitor countries like Vietnam, India, Pakistan, and Myanmar has improved, leading to an increase in the global rice supply. India has also announced its plans to resume exporting white rice in the fourth quarter of this year, which will further compete for market share and potentially drive global rice prices down. This situation may also lower Thai domestic rice prices.

Indonesia, the largest importer of Thai rice in the first half of this year, imported approximately 1 million tons of 5% white rice. The Indonesian government has planned to import a total of 3.6 million tons of rice this year, primarily from Vietnam and Thailand, as well as Pakistan, Myanmar, and Cambodia. BULOG, Indonesia’s rice import agency, has been conducting monthly tenders for rice imports, with an average of around 300,000 tons per month. However, if Thai rice prices do not meet their target price, the orders for that month will be cancelled.

It is estimated that Indonesia will import at least 1.5 million tons of Thai rice this year, primarily depending on price. The Thai and Indonesian governments have discussed a potential purchase of 2 million tons of Thai rice this year. So far, a total of 55,000 tons have been exported on a government-to-government (G2G) basis. However, BULOG has shifted to government-to-private (G2P) purchases recently for faster transactions.

Despite the challenges, Thailand is still expected to export no less than 8 million tons of rice this year. However, the monthly export volume is projected to decrease to around 500,000 to 600,000 tons, compared to an average of 850,000 to 900,000 tons per month in the first half of the year.

The Thai rice export market is navigating a complex landscape, with competition from other countries and potential fluctuations in global rice prices. However, with its reputation for high-quality rice, Thailand’s rice exporters are working hard to maintain their position in the market. It will be crucial for them to adapt to changing circumstances and find new opportunities to ensure the continued success of the Thai rice industry.

Source: Nation Thailand