Thailand’s Falling Export Price of Rice

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CEIC Macro Watch Global #35 - August 29, 2014 Prices of Thailand’s rice exports have been declining since February 2013. Export prices of 100% Grade A white rice and ordinary 5% white rice fell to USD 470.20/ton and USD 422.20/ton respectively by July 2014 from USD 679.50/ton and USD 596.50/ton in February 2013. This 30% average drop is most likely due to the government’s effort in encouraging rice exports to clear up the stockpile accumulated from a government rice subsidy scheme initiated in 2011. According to this scheme, the government purchases rice from farmers at around 50% above the market price before attempting to pass on higher prices to international buyers by stockpiling, which creates upward pressure on prices. However, this has prompted buyers to purchase from countries with lower prices (such as India and Vietnam). Hence, rice exports from Thailand fell to 6.73 million metric tons in 2012 (a 37.13% drop from their 2011 volumes), and further declined to 6.61 million metric tons in 2013, contrasting with the previous five years’ average of 9.54 million metric tons of exports. Export volumes increased at a rate of more than 50% year-on-year for four consecutive months from February 2014 to May 2014, as the new Thai administration started to pursue a more aggressive pricing strategy. The June 2014 exports figure of 0.85 million metric tons was already double the amount for the same month of the previous year. By Anchalee Prasertkoon in Thailand - CEIC Analyst Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. Back to Blog

29th August 2014 Thailand’s Falling Export Price of Rice

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