Grim prospects for Thai rice exports in 2013

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Grim prospects for Thai rice exports in 2013
By English News



BANGKOK, Aug 1 – Thailand’s rice exports in the first two quarters dropped by 8.4 per cent and the prospects in the second half of the year remain bleak, according to a leading rice trader.

Chookiat Opaswong, honorary chairman of the Thai Rice Exporters Association, said Thailand exported only 2.9 million tonnes of rice, worth Bt61.988 billion, in January-June, a 7.8 per cent decline year-on-year.

The tough competition in the rice market was intensified by the global economic downturn, he said.

He cited continuous rice imports by China, the government’s release of rice from its stockpiles into the market, government-to-government deals with rice importing countries and the reduction of rice pledging prices as the positive factors for the domestic rice market.

But there are challenges, Mr Chookiat said, particularly the mass releases of rice from Vietnam and India into the global market while the prices of Thai rice are higher than Thailand's competitors.

In the long run, old and new rice exporters are concentrating on boosting their exports and penetrating the high-quality rice markets which offer better prices, he said.

The US Department of Agriculture has predicted a reduction in global rice trade by 4 per cent, or at 37.5 million tonnes, lower than last year’s 39 million tonnes.

Thailand’s rank in the global export market is slipping to third position, with an export volume of seven million tonnes, lower than India at nine million tonnes and Vietnam at 7.4 million tonnes.

This year’s total rice exports are predicted at 6.5 million tonnes despite the Commerce Ministry’s target at 8.5 million tonnes, he said.

Mr Chookiat said this year’s global rice market will expand only slightly, while current rice stocks in Thailand and India are 17 million tonnes and 30 million tonnes respectively.

The five top importers of Thai rice are Iraq at 410,000 tonnes, Benin at 330,000 tonnes, the US at 180,000 tonnes, Japan at 170,000 tonnes and Cote d’Ivoire at 150,000 tonnes. (MCOT online news)


-- TNA 2013-08-01

[chooka]

I think it has more to do with the quality of the thai rice and the contamination and not with tough competition. People are turning off Thai rice for a more healthier option that is why you can't sell you contaminated over priced rice.

[OzMick]

That should be "Grimm prospects" - they are likely to make up fairy tales about sales.

[Pib]

I think it has more to do with the quality of the thai rice and the contamination and not with tough competition. People are turning off Thai rice for a more healthier option that is why you can't sell you contaminated over priced rice.

The contamination issue is recent; probably not much of a factor in the reduced exports "over the last year or more" but the contamination issue will definitely impact current/future exports. The real factor is the higher price of Thai rice due to the govt's rice (vote) buying scheme.

But with most Thai voter's now aware of the high cost of the scheme to all taxpayer's, the scheme has probably reached the point where it would be a negative votes-wise in the next election. The govt will eventually reduce the amount they are paying rice farmers...at the end of the next crop the govt says but I expect farmers will be rallying against that (again) over the coming months.

So by the next election maybe the scheme won't be as big of a taxpayer money-pit. Heck, the PTP will talk how it was a good thing for the country, but needed to be tweaked to maximize votes for the good of the country.

[Bluespunk]

"The tough competition in the rice market was intensified by the global economic downturn, he said."

That's not why exports are falling. The govts rice scheme alone is responsible. Every negative factor that has impacted upon exports since the criminally negligent scheme was launched has been a direct consequence of the scheme.

[Robby nz]

From what was reported earlier the 5th biggest buyer the Ivory Coast is not buying any more after they had to dump 20% of the last lot they bought.

The Thai Govt said it was they who had cancelled the orders to the Ivory Coast because of a change of Govt there.

This was a big lie as the Govt there had not changed.

It was also reported recently that China had not actioned a MOA to buy Thai rice that was signed 2 years ago yet the OP mentions continuous rice imports by China and I see China is not among the top 5 mentioned therefor sales to China must be under 150K tons. They must be getting their rice elsewhere.

Of course it is a secret just how much has been sold in G 2 G deals however one would imagine that if G 2 G deals were done then the country that bought the rice would no longer have to buy through the normal dealers.

[Neilly]

But there are challenges, Mr Chookiat said, particularly the mass releases of rice from Vietnam and India into the global market while the prices of Thai rice are higher than Thailand's competitors.

I think it would be safe to call that an understatement

[chooka]

"The tough competition in the rice market was intensified by the global economic downturn, he said."

That's not why exports are falling. The govts rice scheme alone is responsible. Every negative factor that has impacted upon exports since the criminally negligent scheme was launched has been a direct consequence of the scheme.

The strength of the baht doesn't help either.

[Mampara]

Give it as a gift to destitute countries. and write it off as a loss, before it becomes inconsumable, and put a silver lining around your dark haloes.

Edited August 1, 2013 by metisdead
Bold font removed.

[allan michaud]

Give it as a gift to destitute countries. and write it off as a loss, before it becomes inconsumable, and put a silver lining around your dark haloes.

Snowballs chance in hell of that happening. That will only happen if they have some rotten or highly contaminated stock.

[TackyToo]

"The tough competition in the rice market was intensified by the global economic downturn, he said."

Never underestimate an expert’s opinion!

"Thailand’s rank in the global export market is slipping to third position, with an export volume of seven million tonnes, lower than India at nine million tonnes and Vietnam at 7.4 million tonnes."

Rotten and bugs and bird droppings infected rice offered to an inflated price only attracts a small group of buyers. Is this really a surprise?

[drdoom6996]

That should be "Grimm prospects" - they are likely to make up fairy tales about sales.

Oh come on, it will only be a "little white lie" to keep the public happy!

[drdoom6996]

It still reminds me of 30 years ago when the Hunt Brothers tried to do the same thing with silver. They lost their respective asses.

[johnlandy]

"The tough competition in the rice market was intensified by the global economic downturn, he said."

That's not why exports are falling. The govts rice scheme alone is responsible. Every negative factor that has impacted upon exports since the criminally negligent scheme was launched has been a direct consequence of the scheme.

Correct! 'they couldn't run a pi$$ up in a brewery"

[monty1412]

Can rice be used to soak up oil spills ?? I think you see where Im going wiht this one ....

[Thai at Heart]

About 50 % drop since this thing started?

[fakename]

I thought Thai rice was already in the "high quality" market. Of course, they could sell it to the high-quality tourist, that Thailand is aiming for, that will be swimming at the high-quality beaches. Can this be the hub of high-quality?

[retell]

nake sure it is not contaminated then put it on a boat and give to african countries that need it and also give free to the people in asia there is to much and next year gonna be the same load again

all that talk about lose face now there is a chance the can gain some face let them take it

Edited August 1, 2013 by retell

[RickBradford]

A report on VOA Thai estimates losses from the scheme at $19 billion, an accurate snapshot of the level of performance of the Pheu Thai administration.

On the other hand, it's only $270 for every man, woman and child in Thailand, no doubt they can afford it.

[ginjag]

nake sure it is not contaminated then put it on a boat and give to african countries that need it and also give free to the people in asia there is to much and next year gonna be the same load again

all that talk about lose face now there is a chance the can gain some face let them take it

It's all quite simple when you think about it----Sniff/smell it before you buy,

[trainman34014]

Just for once they should show a little kindness to the people who voted them in and start handing out free rice to the poorest families and heavily discounted prices to the rest of the population. At last this poxy Government could actually say they have done something useful.

[Gsxrnz]

It seems that most if not all government officials and politicians are completely unaware of the laws of supply and demand.

Subsidies that create artificial pricing have very long term effects, even more so when the subsidy involves a major export crop and there are eager competitors that can quickly fill any supply gap at a cheaper cost to the purchaser.

Thailand has made a rod for its back that may take a decade to recover from. Rice production stability/pricing cannot even begin to recover until/unless the subsidy is stopped.

The irony is that due to world oversupply and a total domestic cockup in the scheme and its administration, it may well come to the stage where the government (or the opposition) decide to pay farmers a subsidy/incentive NOT to grow rice.

The best way to increase export prices is create a supply shortage.

[Gsxrnz]

It seems that most if not all government officials and politicians are completely unaware of the laws of supply and demand.

Subsidies that create artificial pricing have very long term effects, even more so when the subsidy involves a major export crop and there are eager competitors that can quickly fill any supply gap at a cheaper cost to the purchaser.

Thailand has made a rod for its back that may take a decade to recover from. Rice production stability/pricing cannot even begin to recover until/unless the subsidy is stopped.

The irony is that due to world oversupply and a total domestic cockup in the scheme and its administration, it may well come to the stage where the government (or the opposition) decide to pay farmers a subsidy/incentive NOT to grow rice.

The best way to increase export prices is create a supply shortage.

[otherstuff1957]

I just read in a US newspaper that experts are predicting a bumper rice crop this year. They say that prices may fall to an all-time low.

[otherstuff1957]

I just read in a US newspaper that experts are predicting a bumper rice crop this year. They say that prices may fall to an all-time low.

[Baerboxer]

It will all work out. PM/DM Yingluck will bring back large orders from her African trip. The Iranians will place massive orders. There is still 5 months of the year left - plenty of time for the roving PM to make more trips and secure valuable deals.

Of course, the details of all the deals have to be kept secret at the request of the customer countries. Their wishes for secrecy must be respected.

By the end of the year, the inventory discrepancy will have been resolved, the unfounded rumours of contamination dispersed, and the scheme will be showing a profit based on social accounting rather than just normal mathematical accounting. Although the finer details can't be released due to other countries' wishes and security reasons, the FM will be able to assure Moody's that all is well and that there are absolutley no problems with this scheme, which will have more than exceeded its objectives.

It's great to see a democratically elected government with a cabinet of hand picked experts proving all the so called experts wrong - in everything they do. Just wait till Thailand has multicrops thanks to a superior water management system and a superb logistics infrastructure based on a high speed rail network and deep see port facility.

Totally visionary.

[dennisgb45]

I think it has more to do with the quality of the thai rice and the contamination and not with tough competition. People are turning off Thai rice for a more healthier option that is why you can't sell you contaminated over priced rice.

How about the inflated value of the baht?

[ableguy]

Who can believe one word when it comes to rice in Thailand,

[PaullyW]

Who can believe one word when it comes to rice in Thailand,

Who can believe one word when it comes to rice Thais in Thailand?

[kerrysum]

I just read in a US newspaper that experts are predicting a bumper rice crop this year. They say that prices may fall to an all-time low.

I agree with your post..... I feel it will take a dive, and a deep one.... Now let us see, we have old crop prices, and new crop prices....

So what will we call this crop????? Maybe the bargain basement price?

It is better to go back to the old ways, it was simple, and had quality..... sticky fingers make sticky rice.......

kilosierra