Paddy prices for hom mali fragrant jasmine rice have surged to a five-year high, boosted by rising global demand.
According to Commerce Minister Sontirat Sontijirawong, purchase demand has led to a surge in paddy prices, particularly for hom mali paddy, whose price stands at 17,000-18,000 baht a tonne, the highest in five years and up from 9,500-11,600 baht a year ago.
The price of white rice paddy has risen as well, from 7,300-8,000 baht a tonne to more than 8,000 baht, while glutinous paddy prices remain unchanged at 10,000-11,000 baht a tonne.
According to Agricultural Economics Office data, hom mali paddy was quoted at an average 16,070 baht a tonne in 2013.
"The ministry is upbeat that paddy prices will rise further, especially for hom mali rice, which is in high demand among rice exporters because of limited supply and depleted state stocks," Mr Sontirat said. "The prospects of Thai white rice are likewise positive, thanks to higher purchase demand from foreign buyers and depleted state stocks."
He said overall rice exports look promising after Thailand shipped 1.2 million tonnes of milled rice worth US$578 million or an average $474.91 a tonne in January. Shipment volume rose by 16.5% from 1.03 million tones in the same month in 2017.
The Commerce Ministry forecasts rice exports to stay at 9.5 million tonnes of milled rice this year, easing from a record high of 11.6 million tonnes in 2017.
But rice exporters have recently voiced concerns about the strong baht, saying the earlier projections of 9.5 million tonnes may be hard to achieve.
Charoen Laothammatas, president of the Thai Rice Exporters Association, said that in light of the baht's strength, most exporters are apt to avoid selling rice for fear of foreign exchange losses. This will eventually affect farmers' income as exporters delay their purchases.
Chookiat Ophaswongse, honorary president of the association, said that the baht, which appreciated 9.2% last year and 3.2% in January, represents the greatest threat to Thailand's rice exports this year.
The baht's strength has weakened the competitiveness of Thai rice, Mr Chookiat said, adding every one-baht gain against the dollar is estimated to raise the free-on-board price of Thai white rice by $12.50 (292 baht) a tonne and that of Thai hom mali rice by $35 a tonne.
The Agriculture Ministry forecasts rice production for the 2018 season of 30 million tonnes of paddy rice and 22-23 million tonnes of milled rice, similar to last season. Hom mali rice production is estimated at 7.2 million tonnes of paddy in this year's season.