In a time of uncertainty for Thai rice exports, officials are optimistic about the future despite recent challenges. Mr. Phichai Naripthaphan, the Minister of Commerce, recently announced that Thai exports in March 2025 are expected to show significant growth, surpassing 10%. The official figures will be released on April 24, 2025, but preliminary reports indicate a steady increase since the beginning of the year, with January seeing a 13.6% rise and February a 14% increase. If not for the looming issues surrounding the Trump administration's trade policies, the outlook for exports would be even more favorable.
"I believe we can negotiate effectively, and I hope for a positive outcome," Mr. Phichai stated, referring to ongoing discussions regarding the potential increase in tariffs on Thai imports by the United States. The Thai government is actively engaging with U.S. trade representatives to address these concerns. He emphasized that the speculation around cabinet reshuffles should not distract from their daily efforts to improve trade relations.
Meanwhile, exporters are facing mounting pressure as they report a staggering 30% drop in rice exports. R.T.N. Jerin, Honorary President of the Thai Rice Exporters Association, expressed concerns that the new trade policies under the Trump administration could severely impact their competitiveness. The anticipated tariffs on goods imported from Thailand, particularly rice, have left exporters anxious about their future.
"The potential increase in shipping costs due to tariffs on vessels constructed in China, which dominate the shipping market, could lead to a global ripple effect," Jerin warned. This is particularly alarming as the U.S. is set to enforce these tariffs starting in October 2025, which could drive shipping costs up by an additional $6 per ton. Currently, Thai jasmine rice is subject to a 10% tariff when exported to the U.S., and any increase could make it significantly more expensive and less competitive.
Chookiat Ophaswongse, another key figure in the Thai rice exporting sector, noted that the volume of rice exported in the first quarter of 2025 was approximately 2.1 million tons, a decrease of about 30% compared to the same period last year. This decline is attributed to a resurgence in Indian rice exports and a slowdown in imports from major markets like the Philippines.
"India has returned to the market with aggressive pricing, offering rice at rates that are $40 lower per ton than Thai rice," Ophaswongse explained. This has prompted countries such as South Africa, Malaysia, and the Philippines to reconsider their purchasing decisions, further complicating Thailand's export ambitions. Last year, the average price of Thai white rice was around $600 per ton, but that has dropped to approximately $400 this year.
Despite these challenges, the Thai Rice Exporters Association remains hopeful, maintaining an export target of 7.5 million tons for the year. However, this figure will be reassessed mid-year based on evolving market conditions and the impact of U.S. tariff policies.
Looking forward, the association is closely monitoring several factors that could influence rice exports. These include the U.S. policy changes, the competitive landscape in the Asian market, and shifts in demand from China, which has recently increased its imports of Thai jasmine rice.
"The U.S. market is showing signs of increased interest in Thai jasmine rice as importers stock up before potential tariff hikes take effect," Ophaswongse noted. Currently, the U.S. imports about 1.3 million tons of rice from around the world, with Thailand contributing approximately 630,000 tons. In the first three months of this year, Thailand has already exported over 200,000 tons to the U.S. at an average price of $1,000 per ton.
However, if the U.S. imposes additional tariffs on Thai rice, potentially raising them to 20-25% or even 36%, prices could soar to between $1,200 and $1,300 per ton, drastically affecting Thailand's competitiveness in the global market.
As the situation develops, stakeholders in the Thai rice industry are bracing for a challenging year ahead, with many hoping that negotiations with the U.S. will lead to a more favorable trade environment. The outcome of these discussions will be crucial, not just for the rice sector, but for the broader economic landscape of Thailand.
