Because of unprecedented difficulties, Thailand may be outstripped by Vietnam in rice exports this year, but this may only be for the short term.
The US Department of Agriculture in its May report showed that Thailand suffers heavily from drought, while Vietnam doesn’t.
The agency predicted that Thailand’s rice output this year would decrease by 2.34 million tons, or 11.5 percent, while Vietnam’s output won’t see reductions.
The reports of Thai agencies showed that the baht price increased by 2.18 percent in the first half of 2019, from 32.31 baht per dollar to 31.61 baht per dollar. The local currency increased by another 3.52 percent in the second half of 2019 to 30.49 baht per dollar.
In the second half of 2019, Thailand’s rice exports decreased by 1.1 million tons compared with the first half.
|The reports of Thai agencies showed that the baht price increased by 2.18 percent in the first half of 2019, from 32.31 baht per dollar to 31.61 baht per dollar. The local currency increased by another 3.52 percent in the second half of 2019 to 30.49 baht per dollar.|
Nguyen Dinh Bich, a respected trade expert, in his article on Thoi Bao Kinh Te Sai Gon, cited statistics by Thai agencies as reporting that Thai export volume in January was 547,000 tons, a sharp fall of 42.5 percent compared with the same period last year.
The sharp falls were also seen in the next two months, which led to the modest total export volume of 1.47 million tons in Q1. Meanwhile, Vietnam exported 1.52 million during the same time.
According to the US Department of Agriculture, as of early May, exports of white rice, which account for 2/3 of Thailand’s total exports, still saw a decrease of 38 percent, though Vietnam’s and India’s exports were interrupted at moments.
As such, it is highly possible that Vietnam will still be the second largest rice exporter in the upcoming months, the position where Thailand stood firmly for many years.
Nevertheless, Bich doesn’t think that Vietnam will be in the second position for a long time.
The US agriculture department insists that the total rice demand of the world will continue decreasing in 2020 for the second consecutive year.
In such condition, the only way for Thailand to implement a plan to reduce their very large rice stockpile is to reduce their export prices.
Thailand began reducing prices in their offers in the first three weeks of May and the trend will continue in the remaining months of the year.
In other words, the second position among the largest rice exporters belongs to Thailand and the country is likely to have to lower export prices in order to protect its position.
After a year letting the private sector import rice on a “tax-based mechanism” instead of a quota-based mechanism in line with the G2G regime, the Philippine side is considering a comeback to the previous regime to import 300,000 tons of rice.
Vietnam will ship 60,000 tons of rice to the Philippines after it won part of a 300,000-ton government-to-government rice tender held on June 8,