Decade after decade, India, Vietnam, and Thailand have held strong as the dominant forces in the world’s rice exportation market, amassing an incredible 72% of global market share. However, according to prominent International Rice Consultation (IRC) consultant and Associate Professor Aat Pisanwanich, the tides are changing in the agricultural world.
“Now, the battleground has diversified with the emergence of several significant players. Countries such as Pakistan, Myanmar, United States, China, Cambodia, Uruguay, and even South American powerhouse Brazil have entered the rice export game, chiseling away at the market share of the once formidable trio to 65%,” said Pisanwanich.
In the midst of this shifting terrain, India has managed to hold its top spot, retaining substantial influence with a 37% market share. Meanwhile, old titans Thailand and Vietnam are caught in a fierce contest for the second spot, each hovering around a 14% share of the global market.
In a surprising turn of events, the export volume from Thailand and Vietnam has seen a regression over the last half-decade. Conversely, India and an array of other countries have experienced a surge in export volumes, told Pisanwanich.
“The exportation of rice from Thailand is centered on five major markets – Europe, Africa, the Middle East, Asia, and ASEAN,” Pisanwanich explained. “But in recent years, this market structure seems to have undergone a paradigm shift; for every two steps forward, we seem to take three steps back.”
While the export markets in Africa and Europe have seen consistent growth over the past five years, their counterparts in the Middle East, Asia, and ASEAN have exhibited a retreating trend. Formerly accounting for a colossal 70% of exports, these markets are seeing a contraction.
Stepping into the limelight, the Middle East, previously responsible for a whopping 60% of Thai rice exports, has slimmed down to a mere 25%. Why? Buyers are switching their allegiances to other suppliers like India. Similarly, Asian and ASEAN consumers have been seen gravitating towards Vietnamese and locally grown rice.
“In 2017, Thai rice exports hit an all-time high at 11 million tonnes, but by 2020 it had drastically plunged to 5 million,” said Pisanwanich. “Despite Thailand’s consistently lower pricing across all markets, India’s export volume began a drastic ascent in 2018, jumping from 10 million tonnes to an impressive 18 million in 2022.”
Thailand’s agricultural industry, Pisanwanich asserts, is in a pressure cooker, caught between escalating production costs and intense competition from a bunch of new and seasoned adversaries.
“For Thailand to stand any chance against its competitors, we need to take a comprehensive look at our strategies surrounding the entire system of rice production and exportation. It’s time we start thinking ten steps ahead,” urged Pisanwanich.
Chukiat Opaswong, the Honorary President of the Thai Rice Exporters Association, projected an optimistic outlook for the future. Chukiat postulates that rice exports will reach an impressive 8 million tonnes in 2023, marking the highest level in five years.
Several contributing factors are expected to serve as winds in Thailand’s sails, including rising global demand spurred by fears of El Nino’s impact, and India’s strategical decision to ban non-basmati rice exports from July in order to bolster their domestic reserves.