It is likely that Thailand will break its last year’s record for rice exports while bringing higher rural income and making a contribution to broader economic growth even though success comes with its own challenges. Somewhere in the middle of August, the Ministry of Commerce’s Department of Foreign Trade mentioned that it expected outbound rice shipments in order to reach 11m tonnes this year.
Adul Chotinisakorn, the director general of the DFT, mentioned that sales had raised significantly across the international markets, especially in Malaysia (53%), Philippines (25%), and Indonesia (67%), and Thailand has exported a total of 6.7m tonnes till August 8.
In fact, Thailand and China negotiated for selling an additional 1m tonnes of rice while boosting export expectations. In all, overseas shipments are accountable for more than ½ of Thailand’s rice harvest in this year. The output is presently estimated at around 21m tonnes, based on the US Department of Agriculture’s Foreign Agricultural Service.
Income is Expected to Rise alongside Exports
In relation to this, last year Thailand shipped 11.48m tonnes of the cash crop, which has exceeded its previous high of 10.96m tonnes in 2014. Besides, the industry is also expected to generate much higher revenues this year. As of early August, the total sales have gone up to $3.4bn- a 9.8% increase year-on-year- while placing the industry squarely on the track to surpass previous year’s sales total of $5.1bn.
Backed by the reduced output from its competitors because of the drought conditions resulted by the El Nino phenomenon of 2015-16, the Thai government is able to release a certain portion of the stored rice over 2016 and 2017, so that by the mid-march this year only 2m tonnes remain.
High Farm Income
It is the reduction of the government’s rice inventory and improvement in export sales has supported a steady growth in farm incomes in the recent months, based on the report issued at the end of June as stated by the Kasikorn Research Centre.
On the other hand, the second-quarter income rose by 8.7% in the month of April, peaked at 10.3% in May and then grew 7.9% in June. It is after a week in the first quarter, the agricultural household earnings rose by 2.4% over the first 6 months of the year.
