Thai rice exports face rising competition globally
Thai rice exports have dropped considerably from a decade ago when Thailand was among the only three major rice exporters globally, Intelligence Research Consultant Co Ltd (IRC) said on Friday.
“Ten years ago, India, Vietnam and Thailand were leading exporters of rice worldwide with a combined market share of 72%,” said Associate Professor Aat Pisanwanich, a consultant at IRC.
“Today, several new competitors have emerged, including Pakistan, Myanmar, the United States, China, Cambodia, Brazil and Uruguay,” he said. “These rice exporters gradually chipped away the market shares of the trio of giants to 65%.”
He said India remains on top with 37% market share, while Thailand and Vietnam are fighting for second position at about 14% market share each.
In the past five years, the export volumes of both Thailand and Vietnam have dropped, while those from India and other countries have risen, Aat said.
“Thai rice has five major export markets; the Middle East, Africa, Asia, Asean and Europe,” he said. “In the last five years, the market structure can be described as ‘two steps forward and three steps back’.”
Aat explained that only two of the export markets have expanded in the last five years, namely Africa and Europe. Meanwhile, three other markets – the Middle East, Asia, and Asean – which used to be responsible for 70% of exports, have contracted.
The Middle East, which used to make up for 60% of Thai rice exports, has shrunk to 25% after several buyers switched to rice from India. Meanwhile, more Asian and Asean customers have also switched to rice from Vietnam and domestically grown rice.
“Thai rice exports peaked in 2017 at 11 million tonnes and then dropped to 5 million tonnes in 2020,” Aat said. “The prices of Thai rice are lower than those of India and Vietnam across all markets, but since 2018 India’s export volume has jumped dramatically from 10 million tonnes to reach 18 million tonnes in 2022,” he added.
Aat said Thailand is caught between increasing rice production costs and fierce competition from new and existing rivals.
“To catch up with competitors, we need to consider the strategy for the whole system of rice production and export for the next 10 years,” he said.
Chukiat Opaswong, honorary president of the Thai Rice Exporters Association, has said that total rice exports in 2023 are estimated to reach 8 million tonnes, which is the highest number in five years.
Factors that will contribute to this target include rising global demand amid the fear of El Nino impact, and India’s ban on the export of non-basmati rice from July to increase its domestic rice stocks, Chukiat said.
