Thailand’s Rice Export Ambitions Face Steep Headwinds Amid Global Market Shifts

Thailand, long the world’s second-largest rice exporter, has set its sights on exporting 7.5 million tonnes of rice in 2025, a target that reflects both ambition and vulnerability. While officials remain officially optimistic, the path to achieving this goal is fraught with challenges ranging from price competition with India and Vietnam to U.S. trade policies and a stronger baht.

The Target and the Reality

The 2025 target of 7.5 million tonnes marks a deliberate 24% reduction from the record 9.95 million tonnes exported in 2024—a year buoyed by India’s temporary rice export ban and global supply shortages. However, the first quarter of 2025 has delivered a stark reality check: exports plummeted by 30% year-on-year to 2.1 million tonnes, with cumulative exports through April dropping a further 19.31% to 2.477 million tonnes. This decline has intensified calls to revise the target downward.

Key Challenges Undermining the Target

1. Competitive Pricing Pressures
   India’s return to the global market in late 2024 has been devastating. Indian rice, priced $40 cheaper per tonne than Thai varieties, has lured buyers such as the Philippines, Malaysia, and South Africa. The Philippines, once Thailand’s largest buyer (importing 4 million tonnes in 2024), is projected to purchase just 1 million tonnes in 2025. Meanwhile, Vietnam—long Thailand’s chief competitor—has leveraged its lower production costs to undercut prices further.

2. U.S. Trade Policies
   The U.S. is Thailand’s top rice market, importing 830,000 tonnes in 2024, including 630,000 tonnes of premium Hom Mali jasmine rice. However, proposed U.S. tariffs—potentially rising to 25% or even 36%—threaten to push Thai jasmine rice prices to $1,200–1,300 per tonne, making it uncompetitive against Indian and Vietnamese alternatives. Compounding this, a new U.S. tax on goods shipped via Chinese-built vessels (effective October 2025) could add $6 per tonne to transportation costs.

3. Currency and Market Dynamics
   A stronger baht has raised Thai rice prices in dollar terms. Meanwhile, favorable weather in 2025 has boosted global rice production, reducing demand. The Philippines and Indonesia, for instance, have halted imports due to domestic surpluses.

Government Efforts to Salvage the Target

The Thai Ministry of Commerce is doubling down on market expansion and diplomatic efforts:
- The Thailand Rice Convention 2025 (TRC 2025), held in May, attracted over 500 international participants, including buyers from Africa and the Middle East. The event targeted 100,000 tonnes in new orders, with a focus on promoting Thailand’s Green Label-certified jasmine rice and sustainability initiatives.
- A recent trade mission secured 400,000 tonnes in sales to South Africa, though this represents just 5% of the 2025 target.

The Unavoidable Question: Will the Target Hold?

The data suggests not. With exports declining since November 2024—including a 23.4% drop in March alone—Thailand risks ceding its second-place position to Vietnam. Even achieving the revised 7.5 million-tonne target would require a 28% rebound in H2 2025, an unlikely prospect given ongoing headwinds.

The Thai Rice Exporters Association has privately acknowledged the need to lower the target, with officials warning of a potential “downward revision” by mid-2025.

Conclusion: Hope vs. Reality

Thailand’s rice exporters are caught in a perfect storm of price competition, trade policy uncertainty, and global market saturation. While the government’s efforts to promote premium rice and diversify markets are commendable, the math remains stark: a 30% Q1 decline and a 19.31% YTD drop suggest the 7.5 million-tonne target is now a stretch.

The critical question is not whether the target will be revised but by how much. With Vietnam poised to overtake Thailand and U.S. tariffs looming, the sector’s survival hinges on structural reforms—such as boosting yields, lowering costs, and negotiating tariff relief. For now, the golden fields of Thailand’s rice paddies mask a harvest of challenges that will test the nation’s agricultural resilience.