In the last decade, the global rice market saw India, Vietnam, and Thailand dominating exports. These countries collectively held a staggering 72% share of the global market, as per insights shared by Associate Professor Aat Pisanwanich, a consultant at IRC.
However, the international rice industry has since witnessed a significant paradigm shift. Several novices on the scene, including Pakistan, Myanmar, the United States, China, Cambodia, Brazil, and Uruguay have started giving stiff competition to the previous three leading countries. This has resulted in a drop of the triumvirate’s total market share to approximately 65%.
Despite the increased competition, India continues to reign supreme with a market share of 37%. However, the race for second place has been far from easy, with Thailand and Vietnam currently neck-and-neck at a close 14% share each.
The last five years have seen Thailand and Vietnam experience a decline in their export volumes, while India’s shares continue to rise, along with entrants like Myanmar, Pakistan, and the United States.
The consultant paints a vivid picture of the Thai rice industry, highlighting its five key markets – the Middle East, Africa, Asia, Asean, and Europe. Over the past five years, this market structure has largely seen a “two steps forward, three steps back” progression.
Among these markets, only Africa and Europe have seen an expansion in rice exports from Thailand. However, the once vibrant markets of the Middle East, Asia, and Asean have experienced a contraction. Although these markets were previously responsible for 70% of exports, they are now significantly smaller.
The Middle East market, which once contributed to a massive 60% of Thai rice exports, has now dwindled to a mere 25%. This drop is mostly attributable to a major switch by buyers to Indian rice. Concurrently, more customers from Asia and Asean have been opting for Vietnamese and domestic rice varieties.
2017 was a landmark year for Thai rice exports, with an all-time high of 11 million tonnes. However, this success was short-lived, evidenced by the drastic drop to 5 million tonnes in 2020. Despite Thai rice prices being more competitive than Indian and Vietnamese ones in all markets, India witnessed a surprising surge in its export volume, jumping from 10 million tonnes to a staggering 18 million tonnes in 2022.
The predominant issues challenging Thailand’s rice industry are the continuous rise in production costs coupled with intensified competition from new and established rivals alike. Pisanwanich opines that to keep up with competitors, a comprehensive strategy for total rice production and export is critical for the next decade.
Chukiat Opaswong, the honorary president of the Thai Rice Exporters Association, projected an optimistic picture for 2023. He has estimated that total rice exports will touch 8 million tonnes, which if achieved, will be the highest in five years. The primary factors that he believes will aid this increase include an upward global demand trend triggered by fear of an El Nino impact, and a ban imposed by India on non-basmati rice exports from July to maintain their domestic rice stockpile.