After losing Nigeria’s rice market, Thai exporters cut 2020 export forecast by 5m tonnes

Thailand Rice Exporters Association has slashed rice export forecasts for 2020 by five million tonnes.

It is now projected that the country will now export 6.5 million tonnes of rice in 2020, the lowest export projections in two decades which is also lower than the previous expectation of a seven-year low of 7.5 million tonnes.

Reuters quotes Chookiat Ophaswongse, honorary president of the association, as saying the previous record was in 2000 when the country exported 6.15 million tonnes of rice.

The association said that its decision to slash the forecast is due to the coronavirus pandemic, drought and a strong baht.

The country has also lost its market share in Nigeria.

Nigeria was ranked Thailand’s fifth-largest market as of 2014, importing 1.23 million metric tonnes of rice.

However, the Central Bank of Nigeria (CBN) restricted forex for rice importation after the 2016 recession to encourage local production.

“Thailand’s rice exports are hampered by a host of negative factors, be it the coronavirus crisis that weakened global demand, a strong baht that makes Thai rice more expensive, or continued drought cutting into production,” Ophaswongse said.

The association said that Thai rice prices are US$30-80 a tonne higher than those of competitors because of the strong baht, while the widespread drought has cut the domestic rice supply by 20 percent or five million tonnes of paddy rice this year.

Thailand was reported to have exported 3.14 million tonnes of rice between January and June, about a third less than the same period in 2019.

Charoen Laothammatas, the association’s president, said Thailand is expected to see a continuous drop in exports as the country’s current rice policy lacks continuity or a long-term development plan.

“Thailand’s production costs are relatively higher than those of competitors, while higher logistics costs and the strong baht have made Thai rice prices become more expensive than the grains of competitors,” Laothammatas said.

In the first half of 2020, India and Vietnam exported 4.53 million tonnes and 4.04 million tonnes respectively with Thailand been the third-largest exporter.

The top five rice importers from Thailand during the period were the US (338,769 tonnes), South Africa (231,412 tonnes), Angola (195,438 tonnes), China (120,207 tonnes) and Japan (116,338 tonnes).

Although Nigeria’s rice importation from Thailand dropped to 5,161MT between January and September 2018, imports to its neighbouring countries increased; lending credence to suspicions of rice smuggling through land borders from neighbouring West African countries.