What causes Thai rice prices to increase continuously?

Thai rice prices have been fluctuating strongly in recent days as they have been continuously adjusted upward.

According to information from the Thai Rice Exporters Association (TREA) on November 29, the export price of 5% broken rice of this country has been adjusted up to 640 USD/ton, an increase of 27 USD compared to November 28 and an increase of 38 USD compared to November 22. And if calculated from the beginning of November until now, the price of Thai rice has increased by nearly 100 USD.

In addition to 5% broken rice, the price of rice in two other segments of this country, 25% broken rice and 100% broken rice, has also been adjusted up by about 30 - 40 USD/ton in the past 2 weeks.

Vietnam's rice export price remains unchanged at 658 USD/ton

While the price of Thai rice has increased, the price of Vietnamese rice has remained at 658 USD/ton for about a month now - according to the update of the Vietnam Food Association (on November 21, the price of Vietnamese rice increased by 10 USD, to 663 USD/ton but immediately after that it decreased back to 658 USD/ton).

At the current price, Thailand's 5% broken rice is approaching Vietnam's rice of the same quality, narrowing the gap to 18 USD/ton (Vietnam's rice is currently at 658 USD/ton).

Explaining the reason for the sharp increase in Thai rice prices, many rice exporting enterprises said that it was due to the large market demand. Specifically, the Philippines recently required traders to buy an additional 1 million tons of rice in the remaining days of 2023, and any enterprise that fails to comply will be put on the "blacklist".

In addition, many other countries such as Indonesia, Ivory Coast, etc. also increased their demand for imported rice reserves.

Another factor, according to experts, is that the Thai government has implemented a policy of supporting capital and interest rates for people, cooperatives and businesses to temporarily store rice. This causes limited supply because people and businesses do not need to sell rice immediately after harvest.

Finally, the Thai rice export market has been hit hard by the weakening baht against the US dollar. The US dollar is now worth around 37 baht, compared to 35 baht last week; the weakening currency has also contributed to a significant increase in the price of Thai rice.

For Vietnamese rice, there has been no change for almost a month now but it remains high due to limited supply and businesses hardly daring to sign new contracts. A rice exporter in Ho Chi Minh City said that during the time when Vietnamese rice was at a high price and increased beyond Thailand, importers have sought markets with good prices and guaranteed quality.

“Although the price of 5% broken rice from Thailand has reached 640 USD/ton, it is still cheaper than Vietnam, so customers choose to buy from Thailand more. As for Vietnam, in addition to the high price, the current limited supply makes businesses more cautious in signing new contracts. This makes the price not fluctuate,” said a representative of this business.

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