Thailand: rice exports remain gloomy

 Rice exports are expected to slightly recover from an expected 5.8 million tonnes in 2020, which was the lowest in 20 years, rocked by weak global purchasing power because of the pandemic, a container shortage and the strong baht.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said he believes rice exports will reach 6.5 million tonnes at best this year, up from an anticipated 5.8 million tonnes worth 110-120 billion baht in 2020.

“Rice exports remain gloomy this year, as consumers worldwide are likely to opt to save their money and buy rice at cheaper prices,” he said.

“Malaysia, which used to buy rice from Thailand and Vietnam, for instance, has now started buying more rice from India, which has cheaper prices.”

Mr Chookiat said the container shortage is another obstacle for rice export prospects, citing the Thai National Shippers’ Council’s (TNSC) expectation that the container shortage will last six months.

About half of rice exports now rely on shipping containers.

The container shortage in Thailand has intensified since June after China announced an easing of lockdown measures and Vietnam ramped up its exports.

The spread of the pandemic worldwide has also resulted in a number of containers being stranded in the US and Europe.

More importantly, demand for export containers, particularly for shipments bound for the US and Europe, surged ahead of the New Year holidays.

Thailand is estimated to face a shortage of more than 1.5 million containers, according to the TNSC.

Mr Chookiat said another factor is relatively low domestic rice production and higher stockpiles by local rice millers and traders, resulting in a rise in domestic rice prices.

Thailand’s rice production is estimated at 18 million tonnes of milled rice in the 2020/2021 season, up from 16.5 tonnes in 2019/2020. He said the stronger baht is not a boon for rice exports, and it may appreciate to below 28 baht per US dollar this year.

The free on board price of Thai white rice 5% is now quoted at US$530 a tonne, while the Vietnam price is $490-500 per tonne. Indian white rice stands at only $370 a tonne, leading importers to buy more Indian rice.

“This year the new crop production in Vietnam from the winter-spring season in February to March is expected to be very good, while China still controls stock as high as 120 million tonnes,” said Mr Chookiat.

“China will continue exporting its old rice to the African market this year after the mainland exported 2.5-3 million tonnes of rice in 2020.”

BangkokPost

Tags: Thai Rice Exporters Association, Thailand, Thai National Shippers' Council