Strong Baht Impacts Thai Exports

- The Thai baht is currently 10-20% stronger than competitor currencies, making it a significant challenge for agricultural exports. Every one-baht appreciation against the US dollar increases the price of Thai rice by $15 per tonne. Rice exports for 2026 are projected to fall to 7 million tonnes, down from an estimated 8 million tonnes in 2025. - India, the world's largest rice exporter, lifted its ban on non-basmati white rice exports in late 2024 and removed the export ban on 100% broken rice in early 2025, increasing global supply and putting downward pressure on prices. These policy shifts caused prices for 5% broken rice from Vietnam and Thailand to drop by as much as 38-45% in early 2025. - The European rice market is growing, with a projected value of over $1 billion by 2033, driven by demand for specialty varieties like Basmati and Jasmine, as well as organic and sustainably produced rice. Germany, a key European market, sees Vietnam and India as its fastest-growing non-European rice suppliers. - The European Union is set to implement a new safeguard mechanism on rice imports starting January 1, 2027, which could trigger higher tariffs if import volumes of both basmati and non-basmati rice exceed historical levels. This is intended to protect EU growers and millers from rising imports of competitively priced rice from Asia. - There is a growing consumer trend in both Europe and Asia for sustainably and organically certified rice, driven by health consciousness and environmental concerns. In the Asia-Pacific region, consumer awareness of sustainable rice is around 61%, with quality and health being the primary purchasing drivers over environmental aspects. - To enhance competitiveness, Thailand's Ministry of Commerce is promoting Thai rice as a cultural product with distinctive value through projects like "Khaopraneat," targeting markets in Germany, Switzerland, and the US. - New European Commission regulations (2023/2835 and 2023/2834) aim to digitize customs documents for rice imports, and have altered requirements for obtaining an import license for Basmati rice. An applicant must now prove they have placed at least 25 tons of Basmati rice on the EU market or exported it from the EU within the last two calendar years. - Vietnam and Singapore signed a Memorandum of Understanding on rice trade in late 2025 to ensure supply chain resilience and food security. This is Singapore's first such agreement and highlights a strategy of securing government-to-government contracts to stabilize supply.