Hong Kong protests, cheap Chinese rivals: why Thai rice is in crisis
- The country was once the world’s top exporter but it has been hit by a triple whammy of unrest in Hong Kong, a strong baht and tough competition
- With rice front and centre in Thai politics, that’s bad news for Bangkok
Thai rice, once dominant on the world market, is now facing a triple whammy of a strong baht, tough competition from Asian neighbours and social unrest in Hong Kong that is weighing on demand.
The weaker sales overseas are part of a lacklustre performance by the country’s export sector amid an almost 10 per cent rise in the currency against the US dollar since the beginning of the year. Rice exports have been left exposed to stiff competition from large producers such as India, Vietnam and China.
Traders have also blamed continuing anti-government protests in Hong Kong, where about half of rice classified as premium produce comes from Thailand. The number of tourists visiting the Chinese city has plunged in recent months, from 5.1 million in July to 3.1 million in September.
Thailand exported 143,000 tonnes of rice to Hong Kong between January and September last year.
In the same period this year, the country managed only 127,000 tonnes – an 11 per cent drop.
“Thai premium white rice caters mainly to Hong Kong’s tourism sector,” said Charoen Laothamatas, president of the Thai Rice Exporters Association (TREA). “But we have seen fewer shipments to Hong Kong in recent months as there is lower demand from restaurants and hotels.”