Thailand may lose its competitive edge as the world's top rice exporter to its major competitor, Vietnam, unless it reduces production costs and increases its rice harvest as well as improves marketing strategies and rice quality, according to a recent study.
Regarding the analysis on survival of Thai rice to compete in the Association of South East Asian Nations (ASEAN) market by the University of the Thai Chamber of Commerce (UTCC) Center for International Trade Studies (CITS),
centre director Aat Pisanwanich commented that the outlook is a cause for concern as Thailand's export quantity has been lowered and lost its markets to Vietnam which is experiencing continuous growth in rice exports.
According to the latest data, Thailand is exporting its rice to the tune of some 10 million tonnes this year, while Vietnam's exports have risen to about 6 million tonnes.
According to the CITS estimate, Thailand's ability to export rice will contract 14 per cent to around 8.6 million tonnes in the next ten years, while Vietnam will expand its market to 7.5 million tonnes, a 25-per cent increase.
Such analysis demonstrated the strength and the weakness of Vietnam that affects rice export competition among 10-member ASEAN, Mr Aat said.
At present, Vietnam can yield rice production at 862.4 kg per rai of paddy land, listed as the 7th rank in ASEAN, whereas Thailand is nearly half that level at 448 kg, considered as lower than an average quantity of 680 kg per rai.
Many factors contribute to Vietnam's advantages in producing rice, the academic said, pointing out that Vietnam has lower rice production costs than Thailand, while its government has a clear policy to increase its rice yield.
The "three decrease and three increase" measure is the main strategy, which has helped Vietnam to earn more profits of 15-20 per cent.
The 'three decrease' means lowering the quantity of seed so as to suit the cultivation area, depending less on chemical fertiliser use, and also on herbicide. The 'three increase' is to raise the quantity of rice yield, the quality and profits.
From this data, Mr Aat said Thailand will start to lose more of its market share and ability to compete in the rice market both in ASEAN and in other regions, whereas Vietnam will be able to catch up with Thailand within ten years.
To be able to maintain competitiveness, Thailand must adjust by implementing four measures -- increase the volume of the rice harvest per rai, lower rice production costs, and to improve marketing strategies and rice qualities such as in terms of taste. Also, the government needs a policy that helps Thai farmers to achieve at least a 30-per cent profit from production costs.