Economy Rice exports: Vietnam threatens to overtake Thailand again

Rice exports: Vietnam threatens to overtake Thailand again

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Published on : 02/14/2020 – 02:39

With rice production falling and less competitive this year, Thailand risks losing its number two ranking in world rice exports, to the benefit of Vietnam.

The Thai association of rice exporters admits it themselves: the kingdom will be hard pressed to reach its target of 7.5 million tonnes of exports in 2020. Vietnam, which hopes to sell 7 million tonnes of rice to abroad this year, could therefore rob Thailand of its position as the second world exporter, behind India. Vietnam has only overtaken Thailand once, in 2012. At the time, the Thai government was unable to sell off its stocks of rice bought too dearly from Thai farmers.

Drought, Baht rise and lack of rice varieties

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This year, on the contrary, Thailand lacks rice, its intermediate harvest suffered from drought. And this rice is not competitive due to the rise in the currency, the baht, against the dollar. Another handicap, Thailand has not been able to diversify its rice varieties to adapt them to the new tastes of the world market, more and more focused on flavored or soft rice.

China and the coronavirus market arbitrators in 2020

The outcome of this rice battle between Thailand and Vietnam will also depend on China. This is underlined by the expert Patricio Mendez del Villar, economist at CIRAD. China has been regulating the market by importing rice for a few years, but with the extension of the coronavirus to neighboring Vietnam, the closing of the border between the two countries could disrupt this trade in Vietnamese rice. China has also become an exporter of rice (3 million tonnes in 2019), it offloads its huge stocks, in particular to Africa, where it carved croupiers to Thailand and India a year latest.

After a decline in world rice trade in 2019 due to lower needs from Indonesia, Bangladesh and China, exports were expected to pick up in 2020. The Covid-19 epidemic will be a double-edged sword : a brake on the rice trade, or an encouragement to stock more from China, Hong Kong or Singapore. The only certainty is that India will remain the world’s leading exporter and rice prices will be more volatile than last year.

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