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10 Oct 2008

Agriculture

Thai Hom Mali Rice: Commanding 75 Percent of US Market… Caution Needed amid Economic Downturn (Business Brief No.2315)

The prevailing US financial crisis that has been felt throughout the US economy and the rest of the world is set to have rippling effects on the Thai exports in 2009, particularly those relying chiefly on the US market. However, the present circumstance shows that the Thai Hom Mali rice may suffer little impact from the US economic downturn and seems to remain promising there thanks to its unique quality and high demand in the US market. Given the government's strong support for market expansion in the US and lower prices for Thai Hom Mali grain than its US counterparts by as much as USD92/ton, exports of Thai Hom Mali rice to the US market have recorded prodigious growth in 2008. In the year to come, shipments of Thai Hom Mali rice to the US may continue to grow steadily. Even so, local exporters of Thai Hom Mali grain should not be complacent and keep a close watch on the US economy. If the adverse effects are more severe than expected and even plunge the US economy into recession and dent US consumer purchasing power further, exports of Thai Hom Mali rice, regarded as a premium product, will inevitably be hurt.

In addition, attention should be especially paid to the problem of adulterated grain in Thai Hom Mali shipments to the US market. We should strictly maintain the quality of Thai Hom Mali grain, categorized as a premium-grade product that fetches very high prices in this marketplace. The Thai official standard calls for 92 percent pure Hom Mali grain, and not more than eight percent of other strains. Some unscrupulous importers have adulterated the Pathum Thani variety with Chinese long white grain and selling it as Thai Hom Mali rice, especially to medium to low-end US consumers. Even though this impact on our Thai Hom Mali shipments to the US market is being moderately felt, attention should be paid to the problem over the long-term.

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