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Thailand Rice Exports Plunge Amid Production Declines, Global Competition
11.01.2020 12:35 "Agro Perspectiva" (Kyiv) —
According to the report of the USDA Grain: World Markets and Trade (January 2020), thai rice exports are forecast to tumble further in 2020, dropping to the lowest level in 7 years. Exports for 2020 are forecast down by a third compared to 2 years ago as exportable supplies fall and prices remain high. The precipitous decline in Thai exports began in calendar year 2019, in part due to tepid demand from key markets. China was Thailand’s second-largest market, but its imports have fallen sharply over the past year. Likewise, Indonesia’s imports plummeted over the past year with more abundant domestic supplies, reducing the need for imports from Thailand or elsewhere. In addition, the strengthening of Thailand’s currency has also hindered exports with the baht now at a 6-year high. Thailand competes with more competitive Indian and Vietnamese rice, which is priced about 20 percent lower. Thus, even as the Philippines soared to become the top global importer, Thailand’s share of its trade was marginal, undercut by Vietnamese prices. At the same time, China has shifted its trading position from net importer to net exporter, returning as a major exporter of low-priced rice as it seeks to offload its copious stocks. Its expansion of market share in African markets has come largely at the expense of Thailand. Looking ahead to 2020, Thailand’s export prospects are grim. Lower demand from key markets and uncompetitive pricing, compounded with a severe drought, are expected to decimate offseason rice production1 . With tighter supplies, Thai exports are likely to remain at low levels. This drop for Thailand represents a dramatic shift in global trade. Only a decade ago, Thailand was the world’s largest rice exporter, but now its share is set to slide to only 15 percent. Thailand has lost significant market share in Africa, where it once had a stronghold. With sustained global import demand, India, Vietnam, and China are poised to capture the growth in 2020 trade.
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