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Thailand, Vietnam Discuss Hike in Rice Prices

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  •  Thailand and Vietnam — The two top rice producers are discussing raising prices.
  • Thailand’s government spokesperson said that farmers’ incomes and bargaining power are being increased.
  • After India, Thailand and Vietnam export the most rice in the world.

Thai government spokesperson Thanakorn Wangboonkongchana told Reuters that two of the world’s largest rice producers are discussing raising prices together.

As reported by Reuters, Thanakorn said, “We expect rice prices to increase, farmer incomes will rise, and bargaining power will increase.”. The price of rice has been low for more than 20 years while production costs have been rising.

After India, Thailand is the world’s second-largest rice exporter, followed by Vietnam. Billions of people are set to be affected by an increase in the price of the staple grain, especially since wheat prices have been on the rise for several years.

Jurin Laksanawisit, Thailand’s Commerce Minister, told reporters on Friday that global demand has recovered and the country’s currency has fallen to a five-year low against the US dollar, which is used in international trade of commodities.

Insider and Reuters’ requests for comment were not immediately responded to by Vietnam’s agriculture ministry.

A meeting of the Vietnamese Food Association and its Thai counterparts in June could result in measures to boost prices.

Vietnamese Food Association chairman Nguyen Ngoc Nam told Reuters that the meeting will focus on sustainable food production. Rice prices cannot be raised or controlled at a time when global food prices are rising.

The US Department of Agriculture reports that neither Thailand nor Vietnam are experiencing a shortage of rice this year. While inflation in both countries has risen sharply in the last year, putting pressure on governments to ease the impact on their populations, as has been the case in many other countries. According to the United Nations, approximately 30% and 40% of the population in Thailand and Vietnam, respectively, are employed in the agricultural sector.

According to the country’s Commerce Ministry, consumer prices in Thailand are hovering around a 13-year high. Statistics from the country’s statistics office show that prices in Vietnam increased by 2.86% on a year-over-year basis in May.

Consumers, however, may be able to purchase rice from other major exporters – such as India, the top exporter.

According to All India Rice Exporters Association president B.V. Krishna Rao, if Thailand and Vietnam raise prices, African buyers will move to India. Reuters reported that neither of the countries is interested in forming a rice cartel with India.

Thai rice export prices have averaged $420 a metric ton this year, according to Reuters, 16% higher than Indian prices. 

According to Indian trade and government sources, rice exports are not set to be limited.

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