The Thai Rice Exporters Association cut its projection for 2020 rice exports from 7.5 million tonnes to 6.5 million tonnes, the lowest in a decade.
Thailand shipped 3.14 million tonnes of rice in the first six months of this year, down 32.7% from the same period last year, with an export value of US$2.2 billion, down 12% year-on year said the Thai Rice Exporters Association.
Based on those estimates Thailand could drop to the world’s third largest rice exporter, after Vietnam and India, due to a prolonged drought, which has affected rice output.
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A prolonged drought has caused first crop output to fall by about one million tonnes and second crop output to fall short by about four million tonnes.
Other negative factors include the strong baht currency, which is about ten percent higher than last year, causing the international prices of Thai rice to be an average of US$50 higher than those of its two main competitors.
Thailand’s benchmark 5% broken rice price is now quoted at US$520 per tonne, while rice from Vietnam and India stands at $440-450 and $360 per tonne, respectively.
This year, the coronavirus pandemic slowed demand for Thai rice as other producers such as Vietnam and India stockpiled their own crops to protect their domestic food market from a possible shortage.
Now they’re releasing their supply into the international market pushing prices down, but the strong baht makes it harder for Thai exporters to compete with other top producers like Vietnam and India.