Thai Exports Face B60bn Hit from Mideast Turmoil
Thailand's exports to the Middle East, valued at B400 billion, could see losses of B60 billion if the Iran conflict disrupts shipping for two months. Thai exporters are already grappling with rising energy, freight, and insurance costs, causing delays on critical Middle East-to-Europe trade routes for rice and other goods.
The conflict's pressure point is the Strait of Hormuz, a chokepoint for about 20% of the world's daily oil trade. Analysts warn that a closure could cause oil prices to surge by 20-100% and sea freight and insurance costs to jump by 50-140%, severely impacting the profitability of shipments from Asia to Europe. This disruption coincides with major policy shifts from Thailand's key rice competitors. Vietnam is strategically pivoting from volume to value, planning to cut exports from 8 million tonnes in 2025 to 7 million in 2026, with a long-term goal of just 4 million tonnes by 2030 to focus on higher-quality grains. India, the world's largest rice exporter, has taken the opposite tack. After lifting all export restrictions in 2025, its shipments rebounded sharply, increasing global supply and intensifying price competition that has disproportionately affected Thai white rice exports. For premium Thai brands, the European Union presents a growing opportunity. The European organic food market is projected to reach €50 billion, with rapidly increasing demand for sustainably sourced and certified rice. Compliance with EU organic regulation (EU) 2018/848 and certifications from the Sustainable Rice Platform (SRP) are becoming critical for market access. Currency fluctuations add another layer of complexity, with the Thai baht's exchange rate against the euro forecast to average around €0.026 by the end of 2026. The baht's volatility remains a key challenge that exporters must navigate when pricing contracts for European buyers. Despite these headwinds, Thai export data from 2025 shows a clear path for premium brands. While white rice exports fell 39.87% by volume amid price wars, exports of Thai Hom Mali (jasmine) rice saw continued growth, with the United States, China, and South Africa being key markets.
