Thai government pushes rice exports

- Last updated on GMT

Related tags: International trade, Trade

The Thai government says it is looking forward to strong growth in
its burgeoning rice export industry during the course of the next
three years, as the nation races to extend its lead in the market.
However, market analysts believe that tough market conditions might
make the course difficult.

Speaking to press in Bangkok this week, commerce minister Watana Muangsook said that he foresaw a 'golden age' for Thai rice exporters during the course of the next three years as production levels continued to race ahead.

However, Watana also pointed out that the continuing challenge of shipping and logistics issue would have to be tackled if production levels were to continue increasing. In recent months the global trade in food commodities, and in particular grains, has been hit by rising freight costs. This has meant that the long-haul export of commodities has become less and less profitable.

Watana added that the rice producers would have to devise a strategy aimed at avoiding the pitfalls created by the challenges thrown up by transport and logistics.

For the most part Thailand's rice trade is with Africa and Asia, with China being the largest single market. In 2001 Thailand exported 3.5 million tons to Africa and 2 million tons within Asia. Exports to the US and Europe have remained under 0.5 million tons, mainly due to geographic proximity.In the past few years the country has overtaken traditional rice exporting nations such as India and Vietnam to become the world's largest exporter. Recent export figures show that for the six month period to June 2004, exports rose to a total of 4.962 million tons, compared to 3.519 million tons during the same period in 2003. On the strength of these figures the Thai Board of Trade is predicting that exports should grow from a record high of 7.58 million tons in 2003 to as much as 9 million tons in 2004 and that by 2005 they should hit 10 million tons.

However, some industry experts believe that Thailand's ambitions to extend its leading position in the global rice export market may have certain oversights.

"Everything really depends on the market price,"​ Jef Jordaens, a rice broker with Belgian-based company, Schepens​ told AP-foodtechnology.com. "At the moment international demand for Thai rice is strong, with the Middle East and West Africa really driving the market. This is having the affect of firming up prices, which in turn is firming up the market and making things more stable."

"I think that the Thai government could achieve its aims to further increase its share of the international export market, particularly considering the fact that Vietnam has recently imposed a ban on extending exports of its rice. However, what might prove to be the Thai industry's downfall is the current state of its logistics and the infrastructure it has to rely on. Thai sea ports are not the most modern and any significant increase in exports will put further strain on facilities that are often already over-stretched."

Meanwhile, in a move that also aims at extending future exports, the government has also announced that it intends to extend its use of fragrant rice strain Pathum Thani 1. This strain of rice aims to offer importers a cheaper alternative and will also enable the country's exporters to be more competitive with China and Vietnam on the international market.

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