India, the world’s largest rice exporter, has introduced measures to significantly restrict rice exports, causing chaos in the rice market in Thailand, the world’s second-largest exporter. The circulation of white rice is tight and the price is soaring. Due to the hoarding of white rice by some enterprises, there is even an abnormal situation where the export price cannot be determined.
The price of polished rice in Thailand reached 21,000 baht (approximately RMB 4,359.39) per ton in early August, an increase of nearly 20% compared to around 17,000 baht (approximately RMB 3,529.03) per ton a few weeks ago. Export prices, an international indicator of traded white rice, also rose 5 percent to $610 a tonne, the highest price in 11 years.
At present, although the Thai government has not introduced export restrictions, companies are reluctant to export due to concerns about insufficient supply.
Women planting white rice in northern Thailand (August, photo by Ken Kobayashi)
An official of the Thai Rice Exporters Association said that the current rice market is “in a state of chaos.” Thailand’s annual white rice production is generally about 20 million tons, half of which is exported. Although “there has been no tight supply situation” before, it is said that this year exporters were unable to give prices due to concerns about price fluctuations and unstable supply.
India issued an embargo on rice in July. Since then, importing countries of Indian white rice have worried about the reduction of stocks and have begun to explore countries such as Thailand and Vietnam to replace India.
Due to concerns about the insufficient circulation of white rice, some companies in Thailand have hoarded white rice. If export prices rise, the price competitiveness of Thai white rice may collapse. As India disappears from the international market, business opportunities for Thai white rice, which was expected to increase exports, will be lost.
Unusual weather is also a headwind. In previous years, due to Thailand’s geographical location with a rainy season and large-scale irrigation facilities, white rice could be grown year-round. However, due to the impact of the “El Niño phenomenon” on the sea surface temperature rise in the Peruvian waters of South America this year, the rainfall required for rice cultivation in Thailand will decrease from September to October, and the production of white rice marketed in November may decrease.
Nihon Keizai Shimbun (Chinese version: Nikkei Chinese Net) APORNRATH PHOONPHONGPHIPHAT Bangkok
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2023-09-04 21:00:14
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