INTERVIEW: Thailand's rice exports buoyed by buyer trust despite market challenges, says TREA president

Thailand's rice exports are expected to reach 7.5 million mt in 2025, supported by early-year momentum and strong buyer trust, even as global market conditions remain weak and Indian competition intensifies, Charoen Laothammatas, President of the Thai Rice Exporters Association, told Platts, part of S&P Global Commodity Insights, in an interview.

"In the first four months of 2025, we've already exported about 2.5 to 2.7 million mt, so we're confident that we'll hit our annual target," Laothammatas said.

The FAS USDA projects that Thailand will export 7 million mt in marketing year 2024-25, with an anticipated increase to 7.2 million mt in MY 2025-26. Large exportable supplies will boost shipments to traditional markets, including China and Iraq, according to the USDA's latest report released in May.

India's record harvest of around 147 million mt, coupled with subdued demand from large buyers like Indonesia, is weighing on the global rice market. "India's aggressive pricing is impacting the entire market, making it more challenging for Thailand," he said.

Despite these difficulties, Thailand continues to enjoy a competitive edge rooted in its reputation for quality and reliability.

"Buyers are willing to pay a couple of dollars more for Thai rice because of our consistent quality and reliability," Laothammatas said, pointing to South African buyers' preference for Thai rice.

Thailand ships around 650,000 mt of Thai Hom Mali rice to the US each year, and although demand remains strong, rising tariff risks could allow Vietnam to gain a foothold. "Vietnam exports around 30,000 mt to the US each year, and they could potentially replace Thai Hom Mali in the long term if a higher tariff is imposed by the US," he said.

The TREA continues to oppose government intervention in rice exports. "Unlike some countries, we've never imposed an export ban on rice," he said, adding that Thailand believes in allowing free-market dynamics to drive the trade.

Short-term pressure on Thai rice prices is likely to persist, driven by India's surplus and price dumping. "Here in Thailand, paddy prices have dropped below production costs, which is hurting farmers," Laothammatas said. He warned that some farmers may skip a growing season as a result.

Looking further ahead, Thailand's rice export industry faces broader challenges, including political instability and rigid export standards. "Strict export standards may hinder growth," he said, pointing to the high purity requirements for Hom Mali and fragrant rice, which add to inspection and compliance costs.

Unlike other commodities, rice remains largely a spot market product, and long-term contracts are unlikely to become the norm, according to Laothammatas.

To secure its future in the global market, the Thai rice industry must invest in new varieties. "We need to develop new rice varieties that are both high-quality and meet evolving buyer standards," he said.