Thailand’s rice exports are expected to drop by as much as 15% this year as a global scramble for the staple food is set to ease, says a senior industry executive.
The country will likely see weaker demand from Indonesia, its top buyer last year, said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association. A fluctuating baht may also harm the country’s ability to compete with Vietnam, he added.
Thai rice shipments last year rose to a five-year high of about 8.8 million tonnes, preliminary estimates show. But Indonesia, which recently increased its imports, will “likely cool its purchases after its presidential election next month”, Mr Chookiat said on Thursday.
“The baht is also very volatile, making our prices uncompetitive, while Vietnam’s new crop is looking good.”
Prices for Thai white rice 5% broken — an Asian benchmark — surged to a 15-year high in December after top shipper India restricted exports and dry weather threatened production. Some countries also ramped up purchases to build stockpiles amid fears that the impact of El Niño would further tighten supplies.
Vietnam’s winter-spring crop, expected to be harvested in February and March, will help bring prices down in that country and lure back buyers such as the Philippines, Mr Chookiat said.
Indian supply may also be freed up after an election expected by May, tempering global supply concerns.
“India is likely to maintain [some export] bans in the first half of this year,” he said. “But if they’re revoked potentially in the second half, global rice prices will immediately drop.”