Bangkok, Thailand (4E) – Thailand lost its position as the world’s largest exporter of rice in 2012 and was overtaken by India and Vietnam, as an industry group on Friday blamed the government’s controversial policy aimed to boost farmer incomes.
On Thursday, Vietnam announced that last year it exported 7.6 million tons of rice, which is 10 per cent higher than the previous year. The U.S. Department of Agriculture said that India exported more than 9.5 million tons of rice in 2012.
Thailand’s rice exports dropped by 35 per cent to 6.9 million tons in 2012 from the 10.7 million tons it shipped in the previous year, according to latest figures of the Thai Rice Exporters Association’s and the country’s commerce ministry.
For the past year, Prime Minister Yingluck Shinawatra has implemented a policy of purchasing rice from farmers at a price of 50 per cent more expensive than the current market price. This program has been popular with Thailand’s rural poor, but it has hurt competitiveness of Thai rice exporters.
The Thai Rice Exporters Association’s blamed the government’s policy to buy unhusked white rice from farmers at a fixed price of 15,000 baht per ton, and high-quality jasmine at 20,000 baht per ton.
Chookiat Ophaswongse, honorary president of the export group, said that every ton of Thai rice is now $130-$150 more expensive compared to its major competitors, resulting to falling exports and lack of willing buyers.
The government remains confident there are still buyers for its rice in the world markets willing to pay at a price that will help raise the living standards of farmers.
In a World Bank report, however, average world price for rice is expected to drop further this year as production of the staple food crop has expanded particularly in India and China.