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The rice market in Asia and the world is showing a downward trend. Rice prices in Thailand, one of the largest rice suppliers in Asia, have fallen to their lowest levels in 15 years. This situation has mainly been caused by an increase in rice supply in the market.
Rice prices are also falling in the world market as production in other major rice producing countries, including Thailand, India, and Myanmar, has increased. According to the World Food Organization's food index, rice prices have fallen by 13.40 percent this year. Even the world market rice price fell to its lowest level in eight years in August. According to The Nation,
This downward trend in rice prices in Thailand is not new; this trend has been seen for several months. In this situation, agricultural experts in the country believe that due to the low price of rice for a long time, the country's farmers may reduce paddy cultivation.
The price of 5 percent milled rice in Thailand last Thursday stood at $ 335 per ton. It was $ 338 the previous week. People involved in Thailand's agricultural sector say that this situation has arisen due to the Thai government's populist policies in the last 14 years. The government has given various guarantees to satisfy farmers. Although about 40 billion or 4000 million dollars have been spent on these programs, a kind of policy trap has been created. As a result, farmers have been discouraged from developing technology, improving skills, or adapting to global competition.
At the same time, Thai traders said that new rice supplies have come to the market towards the end of the rainy season. This is also one of the reasons for the decline in prices. On the other hand, competing countries like India and Myanmar have improved the quality of rice. They have brought modernity to the production system. As a result, they are able to export good-quality rice at a low cost. But Thailand is still stuck in a subsidy-based system. Analysts believe that the country's farmers are facing losses in this situation.
FAO index drops
The Food and Agriculture Organization of the United Nations (FAO) compiles the food price index every month. It shows that this year, the price of rice in the world market has decreased by 13.40 percent. In October last year, the rice price index fell to 98.4. In January this year, it was 113.6. At the same time, the rice price index in October 2024 was 125.7. Accordingly, the price of rice has decreased by 21.7 percent in one year.
This decline in rice prices began in September 2024. At that time, India, the world's largest rice exporter, started lifting export restrictions step by step. This event had a major impact on the rice market. According to the United Nations Food and Agriculture Organization, the price index of all types of rice has decreased by 13 percent this year. News Financial Times
However, the opposite picture was seen at the beginning of 2024. Then, when India imposed export restrictions one after another, rice prices reached their highest level since 2008. Panic arose among consumers around the world. A tendency to hoard was created among people. Protectionist measures were also taken in other producing countries. Since then, the price of rice has started to decline.
Source: Online/GFMM
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