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19 Sep 2008

Agriculture

Rice Export Market Outlook, 2H08-09: Heightened Competition, Buyers’ Market (Business Brief No.2291)

The global rice market has now become a buyers' market after it was an exporters' market, especially Thailand between 2007 to 2H08, while other major exporting countries, including Vietnam, India and the USA were either postponing or restricting rice exports. The moves by these nations helped spur Thai rice exports considerably both in volume and value during that period. However, it has been projected that Thai rice exports will begin to decline in volume and value from 2H08 onward, because Vietnam will enter the market in 3Q08 and India in 4Q08. As a result, international buyers will have more sources for rice, putting them at an advantage in bargaining for better prices. Nevertheless, it is expected that Thai rice exports in volume and value during 2008 will remain favorable as against the records in 2007.

Meanwhile, based on a projection by the United States Department of Agriculture, it is believed that the global rice trade in 2009 will tend to change from 2008 because rice exporting countries will still enforce policies of restraining rice exports to keep prices at higher levels, while major buyers will concentrate on increased rice cultivation to reduce imports and enhance domestic food security to maintain the stability of food prices in their countries. Consequently, rice demand in the global market will likely subside, so entrepreneurs in the Thai rice business should expedite plans to brace for changes in global markets.

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