Thailand to export less rice this year amid production decline
Due to a confluence of factors including an expected production decline, US Department of Agriculture (USDA) said Thai rice exports are forecast to tumble further in 2020, dropping to the lowest level in seven years.
“Exports for 2020 are forecast down by a third compared to two years ago as exportable supplies fall and prices remain high. The precipitous decline in Thai exports began in calendar year 2019, in part due to tepid demand from key markets,” USDA said in an outlook report.
“China was Thailand’s second-largest market, but its imports have fallen sharply over the past year. Likewise, Indonesia’s imports plummeted over the past year with more abundant domestic supplies, reducing the need for imports from Thailand or elsewhere. In addition, the strengthening of Thailand’s currency has also hindered exports with the baht now at a 6-year high,” it added.
Thailand competes with more competitive Indian and Vietnamese rice, which is priced about 20 percent lower. Thus, even as the Philippines soared to become the top global importer, Thailand’s share of its trade was marginal, undercut by Vietnamese prices.
At the same time, China has shifted its trading position from net importer to net exporter, returning as a major exporter of low-priced rice as it seeks to offload its copious stocks. Its expansion of market share in African markets has come largely at the expense of Thailand.