Thai rice shipments will continue falling into next quarter due to tougher competition, while importing countries are facing a sluggish economy and volatile exchange rates, causing Thailand to lose its crown to India as the world’s largest rice exporter, according to industry reports.
Chareon Laothamatas, president of the Thai Rice Exporters Association, said Thai rice shipments in March would amount to 750,000-800,000 tonnes, down from the third month of last year due to some countries turning to other suppliers that are cheaper.
Orders this month will come from the government-to-government contracts issued by the Philippines. Thailand won about 250,000 tonnes, and received orders from African countries for parboiled rice and white rice.
However, orders from African countries would not be as much as last year because most African countries trade in the euro. Currency volatility has caused trouble for them to quote prices, so importers would only place orders for a short period.
Some importers in Africa have turned to buying rice from India and Pakistan due to cheaper prices. With the impending rice harvest in Vietnam, more rice would hit the market and the price of Vietnamese rice would be lower than Thai rice.
With the uncertainty over supply and fluctuating currencies, rice-buying nations have delayed importing rice, or will only order "hand to mouth" for a short period out of fear of losses on huge stocks.
The Commerce Ministry has reported Thai rice shipments in the first two months dropped by 4.7 per cent in volume and 7.1 per cent in value to 1.34 million tonnes worth Bt22.85 billion.
Thailand took over as the world’s second largest rice exporter after India’s exports surged 57 per cent to 1.48 million tonnes from January to February.
Pakistan is the world’s third largest exporter at 970,000 tonnes, followed by Vietnam at 800,000 tonnes and the US at 540,000 tonnes.
Facing many problems over rice stocks and sales, the Rice Policy and Management Committee, chaired by Prime Minister Prayut Chan-o-cha, has recently instructed the Commerce Ministry to set up a committee to probe the rice-selling contracts of previous governments to ensure transparency.
Chutima Bunyapraphasara, permanent secretary of the ministry, said with fear of illegal rice sales, while facing many problems with rice in the government’s stocks, the committee will make an in-depth investigation into rice selling contracts to see whether they are transparent and legal.
The panel will investigate rice-selling contracts from 2008 to last year.