Thailand is seeing its rice prices tumble due to several economic factors, primarily stemming from record-high production levels and stagnant domestic consumption. According to TTB Analytics, rice production for the year 2025 has reached approximately 34 million tons. This figure reflects an increase of approximately 2 million tons compared to the previous year, significantly affecting market prices and placing Thai farmers under immense pressure.
Farmers face several challenges as the price they receive for paddy rice has dropped to about 8,000-8,800 baht per ton, which is around 17% to 24.5% lower than prices recorded at the end of the previous quarter. This decline is primarily influenced by the harvests of mid-season (or "napan") rice, which came to market when demand remained somewhat constant. Consequently, the surplus of rice cannot be easily offloaded internationally, especially with Thai rice being priced higher than competitors globally, such as India.
During the last three months of 2024, exports decreased by approximately 0.59 million tons compared to the same period the previous year, exacerbated by stiff competition as India has resumed exports. TTB Analytics warns this could lead to Thai farmers encountering significant losses once again if intervention measures are not effectively introduced.
On February 26, 2025, the National Rice Policy and Management Committee (NRPMC) convened to discuss emergency measures for the 2025 crop year, identifying three strategies to support farmers: the "Postponing and Storing Rice Project," which aims to reduce the amount of rice released to markets during peak harvests; interest rate compensation for stockpiling businesses; and establishing designated rice purchase points where farmers can sell their produce at reasonable prices.
TTB Analytics criticizes these solutions as mere stopgap measures, merely stalling the rapid decline of rice prices without addressing the root issues of excessive production. The structural problems facing Thai farmers appear to persist, especially during high-output periods, prompting calls for comprehensive solutions. Stakeholders, including farmers and government officials, need to collaborate to find long-term strategies to prevent recurring crises.
TTB Analytics suggests establishing funds to reduce production costs for farmers, which might include subsidies for fertilizers, machinery, and seeds. Further, improving agricultural education through technology could help optimize farming techniques and capabilities, such as smart farming practices and precision agriculture.
These technological advancements would not only increase productivity but also effectively address issues surrounding fertilizer efficiency and pest management. For example, U.S. Department of Agriculture data indicates Thailand's rice yield lags behind competitors by significant margins: 13% behind India, 48% behind Vietnam, and 52% behind China.
TTB Analytics highlights the importance of integrating the agricultural sector with private businesses to boost value-added products derived from rice. Currently, most Thai rice is consumed as staple food, limiting the domestic market's growth potential. Therefore, emphasizing research and development of new rice-based product offerings could promote additional consumption and ease the overflow of produced rice.
It is equally important for farmers to cultivate themselves as entrepreneurs who understand their agricultural activities as business ventures. By embracing this mindset, farmers might even explore niche markets, such as organic Riceberry, which can command prices 20-50% higher than standard varieties.
To summarize, Thailand's drop in rice prices is symptomatic of long-standing structural challenges within the agricultural sector. There is hope, though, as the current crisis could serve as motivation for stakeholders across the board to rally together and implement substantial changes. A concerted and sincere effort from the government and farmers alike may lead to lasting solutions and collaboration, ensuring Thai farmers can thrive, not just survive, and play their role effectively within the global agriculture network.