Thailand could ship up to 9 million tonnes of rice this year because of a surge in demand, driven by concerns over the potential impact of the El Niño weather phenomenon.
According to Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, the industry has a great opportunity to export about 4-5 million tonnes of rice in the second half of this year after shipping 4.1 million tonnes in the first half.
"The price of rice has increased to the highest level in 11 years," he said.
"The price of free-on-board Thai white rice has risen to US$510 per tonne, the same as Vietnamese rice. Indian rice is now $480 per tonne after being up to $100 per tonne cheaper than Thai grains."
Mr Chookiat said there was great concern about El Niño last year, which may have led to a global decrease in rice supply, resulting in panic buying. Many countries have started to protect themselves to minimise risks, and several major rice-importing countries have increased their stockpiles.
For example, the Philippines and Indonesia announced they will purchase more rice, with Indonesia already importing 1 million tonnes.
Malaysia also plans to import 1.2 million tonnes of rice based on lower domestic production and stock levels. The price of rice in Malaysia has increased by up to 10%, which is expected to lead to higher rice purchases from Thailand.
The Philippines has already purchased 2 million tonnes of rice from Vietnam. In the first five months, Vietnam exported a total of 4 million tonnes, yet its annual export capacity is 7 million tonnes.
China also increased its rice imports from Vietnam and started to accumulate rice stocks, he said.
Last year, Thailand shipped 7.69 million tonnes of rice, up 22% from 6.3 million tonnes exported in 2021.
The export value in baht terms rose by 25.1% to 138 billion baht, while the value in dollar terms rose by 14.6% to $3.97 billion.
The export value of rice in 2022 in baht terms rose by 25.1% to 138 billion baht, while the export value in dollar terms rose by 14.6% from the year before to $3.97 billion.
Thailand ranked as the No.2 rice exporter in 2022 after India, which exported 21.9 million tonnes. Vietnam was third, with rice exports totalling 6.31 million tonnes.
Iraq was the largest importer of Thai rice, buying 1.6 million tonnes last year, up 458% from 2021. South Africa came second, importing 775,000 tonnes (down 2.26%), followed by China at 750,000 tonnes (up 18.8%), the US at 650,000 tonnes (up 13.2%) and Benin at 321,000 tonnes (down 15.3%).
As for the impact of El Niño, Mr Chookiat said the level of rainfall needs to be monitored from July to September. If the level declines during this period, it would affect main crop rice production, which relies heavily on rainfall.
Reduced rainfall would slash Thai rice production by 10-15% from the regular level of output, he said. Under normal circumstances, annual main crop paddy rice production is 24 million tonnes, with 8 million tonnes of paddy rice produced during off-season periods.
"Regarding the government's recent instruction to reduce off-season rice cultivation to reserve water resources in dams and prepare for a severe drought next year, we will have to wait and see. The price of unmilled rice is very favourable, with domestic prices reaching 11,000 baht per tonne, which may encourage farmers to continue cultivating off-season rice," said Mr Chookiat.