India’s rice export halt stirs concerns of 10% surge in Thai rice prices

[webfact]

 

Potential tremors in the global rice markets may soon be felt in Thailand as India calls a halt on non-basmati white rice exports, according to high-ranking industry insiders.

 

The abrupt decision, communicated by Indian authorities this week, immediately ignited concerns among Thai rice traders and industry power players, with predictions of an imminent 10% surge in local rice prices.

 

The honorary president of the Thai Rice Exporters Association, Chookiat Ophaswongse is one such expert who has voiced his concerns about the impending ripple effects of India’s decision on Thailand’s economy. Ophaswongse has indicated that the export ban could lead to Thai rice mills and exporters holding off on purchase orders until they can fully assess the extent of the impact. This caution is not unfounded given that India amounts to a staggering 40% of global rice exports and is recognised as the largest rice exporter worldwide.

 

It is reported that the motive behind India’s sudden halt on rice exports is to counteract the internal inflationary pressures, which have seen domestic rice prices hurtle towards multi-year highs. This is also coupled with a threat to production due to volatile weather conditions witnessed in recent weeks.

It is crucial to note that global rice markets are already under tension with global wheat prices exhibiting dramatic leaps. This is attributed to Russia’s aggressive stance against Ukraine and subsequent attacks on Ukrainian ports causing severe disruptions in global supply chains. Wheat prices have reportedly surged by more than 10% within mere seven days, marking the most significant hike in over a year.

 

by Alex Morgan

A farmer walks in a paddy field on the outskirts of Guwahati, India, Tuesday, June 6. (AP Photo/Anupam Nath)

 

Full story: https://thethaiger.com/news/business/indias-rice-export-halt-stirs-concerns-of-10-surge-in-thai-rice-prices

 

-- © Copyright Thaiger 2023-07-24

 

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[hotchilli]

Does Thailand not produce enough rice to feed it's domestic market?

If prices rise 10% that is pure gouging nothing less.

In all the times I go to BIG C or smaller outlets all I ever see are rows of Thai rice...

never have I seen Indian rice on sale.

[Isaan sailor]

If this holds—very good news for the farmers.

[Srikcir]

1 hour ago, Isaan sailor said:

If this holds—very good news for the farmers.

Aside from adverse weather fluctuations, prices for agricultural products may be more determinable by distributors/wholesalers than by producers when it comes to volume sales. 

In 2021 Thailand imported $12M in rice with largest purchase of almost $2M from India. If the other major exporters of rice (Singapore, USA, Pakistan and Japan) do not increase their export of rice to Thailand albeit likely at higher prices, wholesale price for Thai rice should remain stable as Thai rice producers are able to sell more stockpiled rice to the distributors.

Rice farmers make more money by selling more product without trying to raise prices. Otherwise the Thai government has authority to control the commercial retail price to control price gouging by retailers and wholesalers.

[Isaan sailor]

9 hours ago, Srikcir said:

Aside from adverse weather fluctuations, prices for agricultural products may be more determinable by distributors/wholesalers than by producers when it comes to volume sales. 

In 2021 Thailand imported $12M in rice with largest purchase of almost $2M from India. If the other major exporters of rice (Singapore, USA, Pakistan and Japan) do not increase their export of rice to Thailand albeit likely at higher prices, wholesale price for Thai rice should remain stable as Thai rice producers are able to sell more stockpiled rice to the distributors.

Rice farmers make more money by selling more product without trying to raise prices. Otherwise the Thai government has authority to control the commercial retail price to control price gouging by retailers and wholesalers.

You totally missed my point.  When the price of rice rises—it most certainly benefits everyone from farmer to supplier to distributor and retailers.  I have firsthand experience with the producers.  High rice prices at harvest time are a huge benefit to the farmers in Isaan.

[Tim207]

22 hours ago, hotchilli said:

Does Thailand not produce enough rice to feed it's domestic market?

If prices rise 10% that is pure gouging nothing less.

In all the times I go to BIG C or smaller outlets all I ever see are rows of Thai rice...

never have I seen Indian rice on sale.

Rice is a commodity. Less rice on the international market means those companies that need rice to make their products will have to compete with each other on price to secure the supply they need. Sellers are always going to see to the highest bidder, thus retailers have to pay more and charge consumers more. It is basic economics. You are not going to see rice farmers turn down higher offers for their rice so why would anyone else in the supply chain? If you were selling something, I doubt you would sell to the lowest bidder just because they cant afford to pay what others are willing to pay.

[Poseidon]

The same Thailand not supporting sanctions on Russia will now have inflationary food prices forced on them. Interesting ????