Rice shippers grow worried
Hom mali exports in major decline
Rice exporters are growing concerned about the prospects for Thai hom mali rice because of expensive freight rates and greater supplies.
Charoen Laothammatas, president of the Thai Rice Exporters Association, said shipments remain stalled because of a shortage of workers as well as logistics and transport problems following the government's lockdown measures to prevent coronavirus infections.
Freight rates remain prohibitively high, especially for routes to New York and Los Angeles, which have risen to US$18,500 and $15,000 per container, respectively, from only $3,000-4,000 in the period before the Covid-19 outbreak, he said.
Export prices of hom mali rice are now quoted at $700 per tonne, down from $800-900 per tonne at the beginning of this year.
Mr Charoen said Thailand's overall rice production, including hom mali, is expected to return to normal conditions this year after production declined by around 20% over the past two years because of widespread drought.
Thai hom mali rice production is expected to stay at 9 million tonnes of paddy rice, or about 5 million tonnes of milled rice. Half of the production is slated for domestic consumption, with the rest for export.
"We're afraid hom mali exports may drop in the new annual harvest season because of logistics problems and expensive freight rates as well as higher output," he said. "This will affect domestic hom mali rice prices."
Domestic prices of new hom mali paddy were reported to have dropped from 14,500 baht a tonne in January 2020 to 11,500 baht a tonne in December last year.
Prices now stand at 8,600-11,500 baht per tonne.
Mr Charoen said if the Thai hom mali rice price falls, the government has to spend more via its income guarantee scheme for rice farmers.
Last year, Thailand exported 1.33 million tonnes of hom mali rice worth 42.5 billion baht, which represented year-on-year declines of 4.72% and 6.70%, respectively.
In the first seven months this year, Thailand's hom mali rice exports declined by 26.7% to 661,750 tonnes, with the value plunging by 37.8% to $581 million from the same period last year.
The US was the biggest importer of Thai hom mali rice, making up 224,181 tonnes, down by 27.5% from last year, followed by Hong Kong, down by 8.4% to 71,411 tonnes. China declined by 19.8% to 36,093 tonnes, while Singapore fell by 38.7% to 27,408 tonnes, Canada was down by 43.2% to 30,441 tonnes; France decreased 28% to 15,324 tonnes, and Australia fell by 42.7% to 14,921 tonnes.