The Thai Rice Exporters Association hinted at a major turbulence in global rice markets as reports suggest that India, the world’s largest rice exporter is planning to release around 20 million tonnes of stockpiled rice in September. The Rice Exporters Association of the Thailand warned that Thailand rice prices are likely to notice a plunge further next month after the Indian government moves to unload 20 million tonnes of rice from its stockpile. The honorary president of the association, Chukiart Opaswong predicted the scenario.
Unloading of 20m Tonnes of Rice will Hit Global Market
Chukiart Opaswong said that if the Indian government releases 20 million tonnes of rice from its stockpile, Thailand is likely to see a weakened competitiveness in the global rice market. This would further lead to falling rice prices domestically and deal a heavy blow to Thai farmers. Reportedly Indian government will unload the stockpile to make space for the new harvest and the released rice will be used for ethanol production, distribution to the poor under government schemes, and after that the government will sell the remainder to international traders in the global market.
Lower Indian Rice Prices to Intensify Competition
“We were shocked to hear the volume because India has set its selling price at just US$230 per tonne,” Chukiart said. He further added that Indian rice exporters may spend an additional US$30 per tonne to upgrade quality to export standards, then sell it at between US$280 and US$300 per tonne – which is lower than the current Thai export prices. Lower Indian rice prices and upgraded export standards will further increase the demand of Indian rice and subsequently result into lower Thailand rice demand and price.
Notably, at present Thailand exports 5% polished rice at US$365–370 per tonne. At these prices, farmers receive only 5,000–6,000 baht per tonne of paddy, compared with 11,000–12,000 baht per tonne last year. Speaking on the intensified competition Chukiart said that the global rice market has already been flooded since the Indian government lifted its export band on polished rice late last year. Thai rice prices fell immediately and are expected to decline further when the 20 million tonnes hit the market next month.