As rice importers target self-sufficiency, Thailand urged to review its policies
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THAILAND has been warned to manage its rice industry more efficiently in terms of global supply and demand, as many countries have become more self-sufficient in rice cultivation and will rely less on import of the grain.
These countries include Nigeria, South Africa, Indonesia, and some in the Middle East.
“With these self-sufficiency policies, Thailand, which is one of the world’s major rice suppliers, will need to ensure that its agricultural policy, especially rice cultivation, is balanced in terms of supply and demand in the world market,” a rice trader said.
“In the near future, if Thailand has not adopted a policy to control rice plantation, it could face an oversupply and a serious drop in rice prices, because many countries will rely more on their own crops.”
The source said several countries had started to become more self-sufficient in rice as a food-security measure many years ago. Not only have such countries started to cultivate more of their own cereal crops, they have adopted new technologies to increase production.
The source also noted that some Thai agricultural companies had begun growing rice in neighbouring countries, and were cooperating with foreign investors to use new technology to increase rice yields overseas.
A report from the Thai Trade Office in Nigeria said Dangote Group, a giant conglomerate in that East African country, had invested more than US$250 million (Bt8.5 billion) to develop 16,000 hectares of land in Jigawa, a state in the country’s north, to set up a full rice business, including cultivation, warehouses and silos. The project will kick off in October.
A total of 14,000 hectares will be used for growing rice. The company also plans to expand into other states, aiming to grow a total of 1 million tonnes of paddy within four years.
Dangote Group’s investment is in response to the Nigerian government’s policy to ensure food security.
The report also said Nigeria had imposed high import tariffs on rice to protect domestic rice businesses, a policy that will affect Thailand and other rice-exporting countries.
Dangote is also involved in oil refining, cement, flour, finance, management, harbours, property development, and telecommunication. It is owned by Aliko Dangote, the richest man in Africa and the world’s 67-richest businessperson, with combined assets worth more than $14.7 billion.
According to the Thai Rice Exporters Association, Nigeria is Thailand’s largest rice importer, buying 1.23 million tonnes worth Bt17.06 billion last year. In the first five months of this year, Nigeria imported 405,851 tonnes of rice worth Bt5.26 billion, an increase of 111.3 per cent in volume and 94 per cent in value.
Meanwhile, the Commerce Ministry says Thailand has a greater opportunity to export rice to the Philippines this year, as it announced it would import an additional 250,000 tonnes this month.
Duangkamol Jiambutr, spokeswoman for the ministry, said Manila would soon open bidding for more rice imports under government-to-government contracts to ensure adequate supply amid the drought affecting much of Southeast Asia.
Because of El Nino, a climate phenomenon largely blamed for the drought, the Philippines saw its rice production drop from 5.06 million tonnes in the final quarter of last year to 4.75 million tonnes in the first quarter of this year. As a result, it will import more rice this year so that the government can ensure its price does not get too high.
