Thailand set a target for rice exports of 7-7.5 million tonnes next year, up from an estimated 6 million tonnes this year, helped by sufficient water supply and a weak baht, making Thai grains more competitive.
Speaking after a discussion with senior Commerce Ministry officials, Charoen Laothammatas, president of the Thai Rice Exporters Association, said ample water supply and a weakened baht, now averaging 33 to the US dollar, are expected to prop up rice exports in the year to come.
The baht's weakness has made Thai rice export prices more competitive, with the free-on-board prices of 5% white rice now quoted at US$390 per tonne, lower than the Vietnamese price of $405 per tonne.
Yet Mr Charoen said container shortages and a lack of shipping space are expected to remain key risk factors, likely to persist until the first half of 2022.
He said Thailand is expected to finish the year with rice exports of 6-6.3 million tonnes, slightly over the 5.72 million tonnes shipped last year.
In 2021, Thailand is projected to remain the world's third largest rice exporter, following India and Vietnam.
"To upgrade Thailand's ranking in the world rice export market, the country desperately needs to speed up developing Thai rice varieties," said Mr Charoen.
"Thailand also has to develop new varieties of fragrant rice and promote them vigourously to compete with other producers."
Thailand has limited the supply of rice varieties to serve customer demand, especially soft-textured white rice.
Thai rice production is expected to increase in the 2021/2022 harvest season, with milled rice production estimated at 20 million tonnes because of plentiful water supplies, up from 17 million tonnes in the 2020/2021 season.
Thailand's rice productivity averages 450 kilogrammes per rai, significantly lower than Vietnam's at 900kg per rai and India's at 800kg.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, recently said rice export volume is likely to gradually drop if Thailand fails to improve Thai rice varieties to meet customer demand, such as offering soft-textured rice, and ignores improving productivity.
"We haven't tackled the problems at their root, focusing instead largely on price support, either via rice pledging or price guarantee schemes. Vietnam focuses on R&D to strengthen its rice industry," he said.
Thailand is also hampered by red tape and lacks the will to upgrade the rice industry, said Mr Chookiat, who is also the managing director of Huay Chuan Group, once Thailand's leading rice exporter.