Thai Rice Export Expected to Drop to 7.5m tons this year
Thailand faces the risk of losing its position as the world’s second-largest rice exporter due to decreased competitiveness and outdated rice varieties. In January 2020, rice exports fell 40% year-on-year to 570,000 tons. With a projected export target of 7.5 million tons, Thailand’s lowest in seven years, it may drop to third place behind India and potentially Vietnam. Factors contributing to this include high production costs, currency fluctuations, and a lack of market-responsive rice varieties. The Thai government and private sector are working on developing new rice strains to regain market share.
Thailand risks losing its place as the world’s second biggest rice exporter this year thanks to weaker competitiveness and a lack of new rice varieties to cater to changing market demand.
The Thai rice export sector is still not performing well, with the January 2020 figure dropping year-on-year by 40 percent to 570,000 tons.
Lt. Charoen Laothamatas, President of the Thai Rice Exporters Association, said this year’s projection for rice exports remains close to the previous year at 7.5 million tons, worth 4.2 billion U.S. dollars.
The target is the lowest in seven years since 2013 when Thailand exported 6.6 million tonnes of rice.
In 2019, Thailand exported only 7.58 million tons of rice, which is lower than 2018 figure by 11 tons, and is considered a 7-year-low.
The private sector will be working with the government to promote new rice strain development to better meet consumers’ demand, and take back the number one global rice exporter title the country once had.
Thailand risks falling to third place in 2020
The association’s target is in keeping with the Ministry of Commerce and United States Department of Agriculture (USDA) forecasts. Thailand is likely to remain as the second biggest exporter following India, who are expected to export 12 million tons this year according to Thai News Agency NNT.
But President of the Thai Rice Exporters Association Charoen Laothamatas said Thailand risks falling to third this year, with Vietnam taking second place amid stiff competition, relatively higher production costs, volatile foreign exchange and widespread drought.
Other risk factors include the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which would let Vietnam expand export markets. But The COVID-19 coronavirus outbreak is expected to make rice consumers, particularly China, Hong Kong and Singapore, raise their stocks
Rice exporters will continue to face challenges, such as the appreciated Thai currency and fluctuations, higher production in other countries such as China and the quality of Thai rice, which has not been improved for a long time.
As global customers now prefer softer grain rice, other countries have gained more market share than the hard grain Thai rice.
The government has set up a joint committee, with delegates from the Ministry of Agriculture and Cooperatives, the Ministry of Commerce and the private sector, to develop soft grain Thai rice, which is expected to be introduced later this year.
Source Link : https://www.thailand-business-news.com/markets/commodities/78023-thai-rice-export-expected-to-drop-to-7-5m-tons-this-year
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