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FILE PHOTO: A farmer holds rice in his hand in Khon Kaen province in northeastern Thailand, March 12, 2019. REUTERS/Patpicha Tanakasempipat/File Photo

BANGKOK: Thailand risks losing its place as the world’s second biggest rice exporter this year due to lack of competitiveness and fewer rice varieties to meet changing market dynamics.

Thai Rice Exporters Association president Charoen Lao-thamatas said that amid stiff competition, higher production costs compared to rivals such as Vietnam, volatile foreign exchange and widespread drought, Thailand risked falling to third place this year, with Vietnam taking second place.

“Thailand has shipped the same rice varieties for 30 years and lacks rice variety development to cater to the consumers’ demands.”

The association had set a rice export target of 7.5 million tonnes worth US$4.2 billion, the same target as the Commerce Ministry.

The Bangkok Post said that the target is the lowest in seven years since 2013 when Thailand exported 6.6 million tonnes of rice.

Thailand shipped 7.58 million tonnes last year, fetching 131 billion baht.

The biggest export market was Benin, which imported 1.07 million tonnes of Thai rice, followed by South Africa (725,461 tonnes), the United States (559,957 tonnes), and China (471,339 tonnes).

Honorary president of the association, Chookiat Ophaswongse, said key risk factors for Thailand’s rice export outlook included the strong baht, drought, China’s huge stocks and ongoing rice variety development in Vietnam for fragrant and soft-textured white rice.

Vietnam also exported rice at cheaper prices (5,600 baht per tonne) compared to Thailand (7,500-7,800 baht per tonne) and tapped into important rice markets such as China, Hong Kong, the Philippines and Malaysia.

Other risk factors included the European-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which would allow Vietnam to expand export markets into the EU and CPTPP members.

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