Shipping container crunch forces Thai rice exports to stay low

Bangkok

THAILAND'S rice exports are headed for another gloomy year, after sinking to the lowest volume in two decades in 2020, exporters said, as a global shortage of shipping containers reduces the prospects of increasing shipments.

According to data from the Commerce Ministry on Dec 2, rice exports for the world's second-largest rice exporter amounted to 5.1 million tonnes up till November 2020, down 28 per cent from the same period a year earlier; the figure is on track for the lowest year since 2000.

Thailand's rice exports are down because the strong baht, which has gained 11 per cent against the US dollar since April; this has made shipments uncompetitive relative to those of its rivals Vietnam and India.

Official export forecasts have not been released yet, but two Bangkok-based rice exporters said they are expecting more pain this year. Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said: "This year is not looking any better. It's still just as gloomy," he said. "The container shortage problem is another obstacle to our continuous export struggle."

Globally, shipping container turnaround times have lengthened because of coronavirus-related handling capacity cuts in Europe and the US. Freight rates have skyrocketed and fewer containers are returning to Asia, creating shortages in these ports. Mr Chookiat said about half of Thailand's rice exports rely on containers, including the premium-grade jasmine rice, which has so far retained demand in wealthier markets such as the US and Canada.

"There's still good demand for our jasmine rice, but we haven't been able to export much of it since November because of the container shortage," he said. Thailand exported 1.29 million tonnes of jasmine rice up till November 2020, up 1.57 per cent from the same period a year earlier, the Commerce Ministry said.

Thailand's container shortage was expected to last for six months, as China and Vietnam also vie to secure containers, said Ghanyapad Tantipipatpong, who chairs the Thai National Shippers' Council.

Thailand will need to additionally import about 1.5 million empty containers this year, she said. REUTERS