Thai exporters concerned about price hikes after India’s rice export ban

Thai exporters concerned about price hikes after India’s rice export ban, Illustrative image (source: bangkokpost.com)

Bangkok - Thai rice exporters are concerned about India's announcement that it will ban the export of non-basmati white rice with immediate effect, saying the move could potentially impact Thailand's rice industry, leading to a possible 10 per cent increase in domestic prices.

Honorary President of the Thai Rice Exporters Association (TREA) Chookiat Ophaswongse said the ban is likely to prompt Thai rice mills and rice exporters to delay rice purchase orders in order to evaluate the impact, as India is the world's biggest rice exporter.

India, which accounts for 40 per cent of world rice exports, on July 20 ordered a halt to its largest rice export category to reduce domestic prices, which have climbed to multi-year highs in recent weeks as erratic weather threatens production.

Rice is a staple food for over 3 billion people, and nearly 90 per cent of the water-intensive crop is produced in Asia, where the dry El Niño weather pattern is likely to curb supplies.

He said that as a result of India's ban, Thai rice exports are expected to be significantly impacted, particularly with regard to the pricing of different varieties for which purchase contracts are still pending. Thai rice exporters and domestic traders may need to hold off on purchase contracts, as they expect India's move may drive global prices higher.

It is anticipated that domestic rice prices may need to be adjusted upwards by at least 10%, he said.

The cultivation of Thai rice itself is currently facing problems of drought in several areas, which raises concerns that the quantity of Thai rice this year might decrease. All parties involved will have to expedite finding ways to address these challenges, Chookiat added.

The Bangkok Post cited a Commerce Ministry source as saying that Minister of Commerce Jurin Laksanawisit is aware of India's problem and has instructed the private sector and Thai commercial attachés in India to investigate the details of the ban, particularly concerning the exemption of Basmati rice.

The Commerce Ministry is to hold a joint meeting with the private sector next week to prepare a plan to cope with the impact, if the ban is true, the source said.

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