Increasing rice prices in Thailand and Vietnam will boost their bargaining power in the global market, according to Thai premier Prayuth Chan-Ocha, a move that will raise food costs for consumers everywhere.
Thanakorn Wangboonkongchana, Prayuth’s spokesman, said in a statement that such a move would benefit millions of rice farmers in the two countries grappling with rising costs and stagnant prices. Vietnamese Deputy Agriculture and Rural Development Minister Tran Thanh Nam discussed a framework for cooperation with Thai officials on Thursday.
As food protectionism and inflation run out of control, the two major rice exporters threaten to boost prices. The Russian invasion of Ukraine has already flattened global food markets, so India could restrict rice exports after similar measures in wheat and sugar.
Despite having no plans to limit grain shipments, Thailand is eager to take advantage of the opportunity while import-dependent countries lock in grain supplies.
In light of the proposed move, Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, explained that it “sounds good in theory, but it’s almost impossible to implement.” “We aren’t the only two suppliers in the market.”
It is also difficult to control the market because of the quality issue. The quality of rice will deteriorate if it is not sold soon after harvest, Chookiat said. “The best way to cooperate with Vietnam is to improve production and transfer know-how.”
In the face of a food crisis that is on the verge of worsening, rice has remained a staple grain. Because of ample production and stockpiles, rice prices have remained subdued as supplies from a major breadbasket are disrupted by the conflict in Ukraine.
Jeremy Zwinger, chief executive officer of The Rice Trader, a researcher, said rice prices will remain low due to abundant supplies until 2023. Although there has been a shift in demand for rice as animal feed, it wasn’t enough to drive the price skyward, Zwinger added, adding supplies may ease once farmers use less fertilizer due to high prices.
The world’s second-largest exporter of rice is Thailand, and the third-largest exporter is Vietnam. Together, the two countries export rice in nearly one quarter of the world’s total. In terms of market share, India holds 40%. Top importers are China, Nigeria, and the Philippines.
More than a quarter of the world’s rice trade is with Thailand and Vietnam combined
Due to the easing of the pandemic and the weakening of Thailand’s currency, its rice exports are benefiting from a rebound in global demand. On Friday, Commerce Minister Jurin Laksanawisit told reporters that this year’s shipments could reach 8 million tons, an increase from last year’s 6.1 million tons.
The Thai sugar and chicken export industries are also expected to benefit from India and Malaysia’s export curbs. Arada Fuangtong, deputy director general of the Department of International Trade Promotion, told reporters that Southeast Asia has an abundance of most of the foods it produces.