Indian rice is half the price
Thai rice exporters were shocked at a trade fair in Germany earlier this month. India offers its rice at half the price of Thai rice ($300 at $600 per ton). The fair visitors thronged the Indian pavilion; the 30 Thai rice exporters had it easy.
'It's really quiet this year. I had only a few customers. Last time, many buyers contacted us, but this year I received very few name cards," said Pimonrat Chitpavanaskul, vice president of Patum Rice Mill and the international division of Granary Co.
The exporters therefore regard the rice mortgage system reintroduced by the Yingluck government as a major threat to their position on the world market, as it guarantees 15.000 baht for a ton of white rice and 20.000 for Hom Mali, about 50 percent above the market price.
Last year, Europe bought 457.499 tons of rice, or 5 percent of exports. Europe is not a big rice buyer. Africa, on the other hand, does. Last year, half of Thailand's rice exports went to the African continent (4,45 million tons). Because they were afraid that the rice would become more expensive, African buyers have already bought 2,42 million tons of Thai rice in the first half of the year. But the buyers there are looking for cheaper alternatives. India is likely to export 2 million pre-cooked rice to Africa in March.
"Who wants to pay higher prices when other countries have the same type of rice, especially during economically tough times like now," asks Orapin Kunaporn, assistant manager at Siam Grains Co rhetorically.
Pimonrat says India plans to export 3 million tons next year; Vietnam and Cambodia jointly export 7 million tons. Burma and Pakistan complete the market with 2 million tons. Earlier this year, India lifted its 3-year ban on rice exports for non-basmati rice.
The floods have so far destroyed 8 million rai of rice fields, producing 6 to 7 million tons of rice. Prices will rise as a result. Rice connoisseurs predict that exports will decrease next year because the warehouses of many exporters are located near rivers [and being flooded]. Poor logistics between warehouses and ports have disrupted trade.
Adisak Pramualmitra, vice president of CP Intertrade Co, which has rice mills in Ayutthaya province, says his company will return to full operation when the water is gone. But the official opening of the new branch, scheduled for early next month, has been postponed. The country's third largest rice exporter estimates that Thailand shipped 10 million tons of rice this year, but 8 million tons next year.
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well, the thai will find something to do with that, just import it and label it differently, just like with the clothing.