Thailand could benefit immensely from an export windfall when India turns from a world supplier to buyer of rice to maintain stocks of about 10 million tonnes. India may become a net buyer of rice for the first time in two decades in 2010 and may buy 3 million tons, said Samarendu Mohanty, a senior economist at the International Rice Research Institute, in an interview yesterday. Rice surged to a record last year, sparking food riots from Bangladesh to Haiti, after fears of shortages prompted producers to slow shipments.
Thailand to benefit from India move to import rice
India, the world’s second-biggest rice grower, plans to import as much as 30,000 metric tons of the grain after a drought in almost half the nation cut output.
Infrastructure services, if quickly improved, could promote a better investment climate in Thailand. Logistic costs, for example, are reported by firms to be higher for them in 2007 compared to 2004. This is particularly true for industries that are located in regions other than Bangkok and vicinity or the East where the major markets and ports are located. They include the food processing and furniture industries. A partial explanation for the higher logistic cost was the sharp rise in diesel prices from 2004 to 2007. However, another important explanation is the increased congestion of roads and ports which added to the transport time and costs. The quality of public utility services (electricity, water, and telephone) have also declined from 2004 to 2007 as the period of service interruptions have risen. This is a reflection of the inadequacy of infrastructure services as demand from businesses have increased rapidly over the years. These service interruptions are costly for firms and will hurt Thailand’s competitiveness as other countries in the region such as China and Vietnam are quickly improving them.
Doing business in Thailand
Imports from new ASEAN member countries also have lower import duties. As part of ASEAN Integration System of Preferences (AISP), tariffs of products such as vinegar, chili, certain vegetables, wood products, and electronic switchboards imported from Cambodia, Myanmar and Lao PDR are either reduced or abolished from September 2008.
A clear policy framework is needed, and the development direction set forth by the policy makers should be based on reliable information on the current status of infrastructure development. Systematic, periodic, and internationally-standard information collection within the infrastructure sector will provide Thai policy makers with good background with which to assess the current situation, identify bottlenecks, set clear policy direction, and prioritize projects more effectively .