Thailand may lose its competitive edge as the world’s top rice exporter to its major competitor, Vietnam, unless it reduces production costs and increases its rice harvest as well as improves marketing strategies and rice quality, according to a recent study.
Regarding the analysis on survival of Thai rice to compete in the Association of South East Asian Nations (ASEAN) market by the University of the Thai Chamber of Commerce (UTCC) Center for International Trade Studies (CITS), centre director Aat Pisanwanich commented that the outlook is a cause for concern as Thailand’s export quantity has been lowered and lost its markets to Vietnam which is experiencing continuous growth in rice exports.
According to the latest data, Thailand is exporting its rice to the tune of some 10 million tonnes this year, while Vietnam’s exports have risen to about 6 million tonnes.
According to the CITS estimate, Thailand’s ability to export rice will contract 14 per cent to around 8.6 million tonnes in the next ten years, while Vietnam will expand its market to 7.5 million tonnes, a 25-per cent increase.
Such analysis demonstrated the strength and the weakness of Vietnam that affects rice export competition among 10-member ASEAN, Mr Aat said.
At present, Vietnam can yield rice production at 862.4 kg per rai of paddy land, listed as the 7th rank in ASEAN, whereas Thailand is nearly half that level at 448 kg, considered as lower than an average quantity of 680 kg per rai.
Many factors contribute to Vietnam’s advantages in producing rice, the academic said, pointing out that Vietnam has lower rice production costs than Thailand, while its government has a clear policy to increase its rice yield.
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Vietnam’s rice exports are expected to average 7.5 million tonnes annually, while Thailand’s will remain around 8.6 million tonnes in that period, said the Center for International Trade Studies at the University of the Thai Chamber of Commerce.
The UN Food and Agriculture Organisation predicts Thailand will ship about 10 million tonnes of rice this year, with Vietnam exporting 6 million tonnes.
Aat Pisanwanich, director of the centre, said Thailand needed to improve its competitiveness, particularly in the Asean market, where Vietnam has a 59.9% share and Thai rice represents 39.6%.
The centre’s latest study shows Thailand cannot compete with Vietnam in rice exports because of 10 factors including lower productivity, higher production costs, lower prices and fragmented marketing.
Vietnam’s rice exports over the past nine months have increased by 12.3 percent to almost 5.4 million tonnes, earning an estimated US$2.2 billion or 15.2 percent more than the same period last year.
The price of rice exports in the reviewed period stands at US$462 per tonne on average, a 2.6 percent rise from 2009. The price of Vietnamese rice is now approximately the same as that of Thailand, the world’s largest exporter of rice. The increase in the price of Vietnamese rice is mainly due to natural disasters in major importing countries and manufacturers such as China, Thailand and Pakistan.
The Philippines continues to be the foremost import market for Vietnamese rice, as it has imported nearly 1.5 million tonnes of rice from Vietnam in the last eight months.
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