BANGKOK: Thailand’s rice exporters expect a drop in sales this year, to around 9.5 million metric tons, as they face for more aggressive competition from its neighbor, Vietnam.
Thailand, the world’s second-biggest rice exporter after India, exported 9.63 million tons of rice in 2016, according to figures from the Commerce Ministry.
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“We target 9.5 million tons this year,” Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, told Reuters. He added the volume would be worth around 150 billion baht ($4.28 billion). Chookiat’s forecast is lower than the 10 million tons forecast by the commerce ministry last month.
The rice trade is expecting a number of difficulties this year, including volatile exchange rates, as rice prices in Vietnam and India are lower and therefore more competitive than Thai rice.
“There’s quite a gap in prices between our rice and Vietnamese rice, which is now $20, and their winter spring crop is very good,” Chookiat said. Thailand also still has about 8 million tons of rice in state stockpiles, which was bought at above market prices by the previous government of Yingluck Shinawatra to subsidize farmers. The government will hold its first state auction on Feb. 16, aiming to offload 2.8 million tons – its most ambitious yet.
It plans to clear the stockpiles by the end of 2017. “If the government can clear the stockpiles within the end of this year like they said, Thai rice exports should improve,” Chookiat said.
