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Rice exports dropped by 30% year-on-year in the first quarter to 2.1 million tonnes, an industry association said. Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, attributed this decline to India's renewed white rice exports and Indonesia, a key importer, temporarily suspending its orders.
This year, Indonesia is expected to import less than 1 million tonnes, with potential resumption of imports expected in the latter half of the year. These circumstances contributed to a 53% drop in white rice export volumes. However, exports of Thai jasmine rice and parboiled rice saw an uptick.
Mr Chookiat emphasised the importance of closely monitoring US President Donald Trump's policy, which has seen a 10% tariff imposed on Thai goods, an increase from the previous 0%. The 90-day delay in enforcing a 36% reciprocal tariff has resulted in a boost in Thai rice orders in the first quarter, with over 200,000 tonnes of jasmine rice exported. Mr Chookiat said that if tariffs rise to 20-25%, it could severely impact exports of jasmine rice to the US, which is the largest market for Thai jasmine rice.
Last year, Thailand shipped 830,000 tonnes of rice to the US, comprising 630,000 tonnes of jasmine rice and 120,000 tonnes of Thai fragrant rice. Annually, Thailand exports 1.3-1.
4 million tonnes of Thai jasmine rice to global markets. Mr Chookiat said that if the US imposes a 25% tariff, the current export price for jasmine rice, which is around US$1,000 per tonne, could surge to $1,250. The association is concerned about whether US consumers would embrace such a price hike.
In the first quarter, Vietnam surpassed Thailand with rice exports totalling 2.3 million tonnes. If Thailand loses its market share for jasmine rice in the US, it could fall from being the world's second-largest rice exporter to third place.
Despite these challenges, the association is maintaining the export target of 7.5 million tonnes for 2025 and plans to reassess this goal mid-year. Another pressing concern is the volatile exchange rate of the baht, affecting Thailand's global competitiveness.
Currently, export prices for Thai 15% white rice are around $400-405 per tonne, which is higher than Vietnam's $385 and India's $365. Charoen Laothammatas, president of the association, said the US announcement regarding the tariff hike on goods transported by Chinese ships could drive Thai rice export costs up by an additional $6 per tonne. This policy will become effective in October.
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