Thailand worries about impact of India's rice export restrictions

Thai rice exporters are concerned that India's recent announcement to ban white rice exports (except long-grain aromatic basmati rice) could impact Thailand's rice industry, leading to a possible 10% increase in domestic rice prices.

Thái Lan lo ngại tác động của việc Ấn Độ hạn chế xuất khẩu gạo

Rice is sold at a supermarket in Bangkok, Thailand.

Mr. Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said that India's ban may cause Thai rice millers and rice exporters to delay rice orders to assess the impact, as India is the world's largest rice exporter.

According to Mr. Chookiat, Thai rice traders are closely monitoring the situation to see if India will ease the ban.

On July 20, India - a country that accounts for 40% of the world's rice exports, ordered a halt to rice exports as domestic rice prices in recent weeks rose to multi-year highs due to erratic weather threatening production.

Rice is a staple food for more than 3 billion people and nearly 90% of the water-intensive crop is produced in Asia, where droughts caused by the El Nino weather phenomenon could limit supplies. In Thailand, rice farming is also facing drought in some areas, raising concerns that output in the world’s second-largest exporter could fall this year.

Thai rice exporters and domestic traders may have to postpone purchase contracts as India’s move could push global prices higher, Chookiat said. Marketing of Thai rice in the second half of the year could be challenging. In the short term, both Thai rice exporters and the domestic market may have to quote rice prices cautiously.

Mr. Chookiat predicted that domestic rice prices may have to be adjusted up by at least 10%. This is undesirable and both the private sector and government agencies must speed up the search for alternatives, especially finding new markets to replace the existing ones, to delay the adjustment of domestic prices.

Meanwhile, the Bangkok Post newspaper on July 22 quoted a source from the Thai Ministry of Commerce as saying that Minister Jurin Laksanawisit had instructed the private sector and Thai trade attachés in India to investigate the details of the ban, especially regarding the exemption of Basmati rice.

Thailand's Commerce Ministry plans to hold a joint meeting with the private sector next week to prepare a plan to deal with the impact, if the ban is approved.

Source