Rice agenda needs unity
The Thai Rice Exporters Association recently revised its estimation of Thai rice exports this year to five million tonnes, the lowest in 20 years, from a previous projection of 6.5 million tonnes.
In contrast, India's Rice Exporters Association estimates the country's rice exports will jump by nearly 42% this year to record highs of 14 million tonnes, from 9.9 million last year, securing the throne of the world's largest exporter of rice.
Vietnam, the third-biggest global exporter, has an opportunity to surpass Thailand in rice exports this year. According to Vietnam's Ministry of Agriculture and Rural Development, the country exported around 6.5-6.7 million tonnes of rice in 2020. What are the problems with Thai rice production?
Thailand, once the world's biggest rice exporter, ceded the championship title to India in 2012. However, the gap in export volumes between the two countries each year was not so big -- just 1-3 million tonnes. This year is the first time that rice export volumes from Thailand have fallen so far behind India, as much as 9-10 million tonnes.
Experts say the sharp reduction of Thai rice exports could be attributed to severe drought during the planting season and the coronavirus crisis that weakened global demand.
Such conditions are exceptional for this year and are expected to improve for the next crop year.
Still, there remains several crucially unsolved problems which will be detrimental to the competitiveness of Thai rice exports in the long run.
They include the appreciation of the baht, fierce competition in the world market, low productivity, and lagging in developing high-yielding rice varieties.
The strong baht and low yield of Thai rice production make Thai rice more expensive.
Thailand's benchmark 5% broken rice price is now quoted at US$520 (16,000 baht) per tonne, while rice from Vietnam and India stands at $440-450 and $360 per tonne, respectively.
Thailand's relatively more expensive prices have led buyers to opt for grains from competitors, particularly Vietnam and India.
While the world market trend has shifted more to a soft-textured, white rice variety, Thailand has yet to export this rice and is lagging in developing this rice variety. Vietnam has developed several types of this rice variety, which are now its prime products.
The Commerce Ministry recently launched the strategic rice plan between 2020 and 2024, focusing on improving yield, variety and increases in its R&D budget.
The plan sets an ultimate goal to raise rice yields to 600kg per rai by 2024 from 450kg per rai currently.
Thailand's average yield of rice production now seems to be the lowest among its competitors. Vietnam's yield is at 934kg per rai, Indonesia (765kg per rai), India (643kg per rai), China (1,128kg per rai) and the United States (1,363kg per rai). It is even lower than neighbouring countries: Myanmar (461kg per rai), Laos (518kg per rai), Cambodia (462kg per rai) and Malaysia (642kg per rai).
One of the key problems is that Thailand allocates little to rice R&D, only 200 million baht, compared to 3 billion baht (US$100 million) spent by Vietnam.
The ministry's plan is noteworthy. Unfortunately, this plan is not the first one but the fourth. The rice strategic plan must be a national agenda item with help from all concerned agencies and ministries. The Commerce Ministry won't be able to solve the problem on its own.
Bangkok Post editorial column
These editorials represent Bangkok Post thoughts about current issues and situations.
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