Covid-19 Enhances Thai Rice Prices to Hit 7-Year Record High

Amid the concern over novel coronavirus, Thailand’s price of rice has reached 7-year record high as many countries across the world are panic buying and eager to stock up on food supplies, along with Vietnam temporary ban on rice exports, lifting higher demand for Thai rice.

Thailand is the world’s second-largest rice exporter after India, but Thai rice exports has been struggling with its lowest export volumes in more than seven years from the beginning of the year as an effect of Thai Baht appreciation and drought, causing the price unable to compete with Vietnam, the third-largest rice exporter. 

However, since the virus outbreak, the good sign for Thai exporters comes after India announcing a three-week lockdown and Vietnam’s ban on rice export due to the matter of domestic shortage during Covid-19 spreading. 

The price of Thai rice, particularly for white rice, a benchmark 5% broken white rice rose from under $500 per tonne last two weeks to the highest level since August 2013, increased more than 12% according to Reuters data.

“Thai rice exports should improve in the second quarter of the year, as our competitors limit exports or encounter logistics problems,” Chookiat Ophaswongse, president of the Thai Rice Exporters Association, told Reuters.

Earlier Ministry of Commerce and Thai Rice Exporters Association were expected rice exports to hit 7.5 million tonnes due to the declining of rice exports in 2019 and a strong Baht, but with the competitors’ restrictions and limitations, that target has a tendency to achieve even Thailand would be affected by drought.

Moreover, Cambodia and Myanmar have suspend the rice exportation as well and Philippines is planning to heighten rice orders to ensure the country food security.  

And if the coronavirus outbreak is not over by the next 2 – 3 months, there is a high possibility that the price of rice could surge by 20-30%.