Thailand is at risk of losing its place as the world's second-biggest rice exporter this year, due to weaker competitiveness and a lack of rice varieties to cater to changing market demand.
Relatively higher production costs when compared with rivals, plus volatile foreign exchange and widespread drought, mean Thailand risks falling to third place this year as Vietnam takes second, said Charoen Laothamatas, president of the Thai Rice Exporters Association.
"Thailand has shipped the same rice varieties for 30 years and lacks rice variety development to deal with changing market demand and consumer behaviour," Mr Charoen said. "This year, the association has set a rice export target of 7.5 million tonnes, the same target as the Commerce Ministry, worth US$4.2 billion."
The target is the lowest in seven years. In 2013, Thailand exported 6.6 million tonnes of rice.
The country shipped 7.58 million tonnes in 2019, fetching 131 billion baht, down 32% and 25% respectively.
The biggest export market last year was Benin, which imported 1.07 million tonnes of Thai rice, followed by South Africa (725,461 tonnes), the US (559,957 tonnes) and China (471,339 tonnes).
Mr Charoen said China is expected to speed up draining its huge stocks of 120 million tonnes of rice. China last year exported nearly 3 million tonnes.
Chookiat Ophaswongse, honorary president of the association, said key risk factors for Thailand's rice export outlook include the strong baht, widespread drought, China's huge stocks and continued rice variety development in Vietnam, especially fragrant rice and soft-textured white rice.
Moreover, Vietnam has succeeded in exporting rice at lower prices than those of Thai grains and tapping key rice markets like China, Hong Kong, the Philippines and Malaysia.
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 to EU and CPTPP members.
Mr Chookiat said the coronavirus outbreak is expected to compel rice consumers, particularly China, Hong Kong and Singapore, to raise their rice stocks.
Indonesia is also planning to raise its rice imports to about 1 million tonnes, up from 300,000 tonnes last year.
"The virus outbreak has created a panic in China, Hong Kong and Singapore, increasing their demand for rice," Mr Chookiat said.
Even with an upsurge in demand, it will be difficult for Thailand to achieve the export target of 7.5 million tonnes, he said.