Pledging policy sees UK importers shun Thai rice

“The rice pledging measure is a bad policy. Imports of Thai rice to the UK have dropped this year due to the price gap between rice from Thailand and other countries. Once British consumers become familiar with other rice, Thailand will not easily get back to the UK,” a UK rice importer warned last week.
The Yingluck government recently dispatched a mission led by Thai Trade Representative Olarn Chaipravat to the United Kingdom to promote trade, including in Thai rice.
In a meeting of the Thai government, Thai rice exporters and UK importers, the importers urged the Thai government to review its price intervention policy, pointing out that it has ruined Thai rice exports to the UK.
One of the UK importers said his country now buys rice from Uruguay, Vietnam, India and other countries. In particular, imports of Thai white rice are falling.
According to the International Trade Promotion Department, India is the major rice supplier to the UK, which has a large Indian community. The UK imports an average of 600,000 tonnes of rice per year, of which brown or husked rice accounts for 43.45 per cent, white rice and jasmine rice for 43.03 per cent and broken rice for 11.11 per cent.
During the first half of this year, rice supplied by India grew 43.35 per cent to 99,766 tonnes, followed by Spain, which jumped by 30.08 per cent to 55,224 tonnes, but Pakistan slid by 54.16 per cent to 21,987 tonnes.
Thailand is the fourth largest rice supplier to the UK, but the volume plunged by 53.07 per cent to 14,693 tonnes during the first half of this year.
The UK importers called on the Thai government to reconsider whether to continue any farm subsidy programmes, as they will erode Thailand’s export competitiveness in the long run.
“Thai rice is too expensive compared with its rivals such as Vietnam, but going further with the policy of the Thai government will shrink export volume,” the source said.
A Thai rice exporter who joined the mission stressed that his company has not seen an opportunity to export more rice not only to the UK but also to other countries due to the unattractive price of Thai rice.
Although he tried to explain, Olarn could not convince the UK importers. He said his government will focus more on exporting higher value-added organic rice. The UK importers said that only a small quantity of such rice was needed and Thailand will certainly lose a big market to other rice traders as the biggest demand is for white rice.
Somkiat Makcayathorn, president of the Thai Rice Packers Association, said the government’s price intervention policy is not a good measure to help farmers in the long run. It should concentrate on market demand and cost competitiveness. Consumers around the globe prefer white rice and sales through modern trade outlets. The government should not focus only on the high-end market, as the market for white rice is much different.
About 30 million tonnes of rice are traded worldwide each year, of which more than 80 per cent is white rice.
Vuttiphon Wanglee, managing director of Chaithip Rice, said the government should create better promotion channels and an export strategy for Thai rice. The government can help farmers but it should also come up with export promotion plans to encourage their production.