05/02/2022, 11.39
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Rice exports fall: Bangkok in trouble

by Steve Suwannarat

Exports have fallen from more than 11 million tonnes to 5.7 million tonnes in two years. The reasons lie in failed economic policies compared to rivals in the region and rising transport costs. International lenders warn of the growing burden of climate change on agriculture.

Bangkok (AsiaNews) - Thailand has gone from being the queen of rice exports to a special vigilante at a time when the whole of Asia is wondering about food supplies because of the conflict in Ukraine, even though the difficulties of the Thai rice sector actually date back to 2012 and were caused by a number of factors, including international contingencies, a persistent domestic political crisis and the granting of unsustainable subsidies.

Economic policies to date have failed: productivity per hectare has been low compared to neighbouring countries (up to 50% lower for some varieties), while high storage costs and prices 0-150 higher than those of rivals have prevented Thailand's exports from taking off, leaving it to India and Vietnam, which have implemented more aggressive and consistent policies.

In a global context of product abundance and falling prices, Thailand has reacted by forcing producers to reduce harvests to avoid a build-up of unsold product, with inevitable social consequences. The contraction of rice exports has been particularly heavy in recent years, falling from 11.2 million tonnes in 2018 (out of nearly 21 million tonnes produced) to 5.7 million in 2020 (out of less than 18 million tonnes produced), with additional ballast related to the local currency, the baht, which has lost value against regional and international currencies as a result of lower revenues in several sectors, including tourism.

Rivals have also been favoured by proximity to major continental markets, while Thai rice exports are marked by rising transport costs due to demand for valuable varieties in more distant markets.

Another factor that is already influencing the production policies of many nations, and from which Thailand is not escaping, is the environmental threat: according to the Global Climate Risk Index 2021, the country is among the top 10 most affected by the effects of climate change. The warning issued by many quarters, including recently by the Asian Development Bank and the World Bank on the persistence of adverse atmospheric phenomena, calls Bangkok to make difficult choices that require calibrating production, quality and profitability of its rice in a changing market. 

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