Glutinous rice in ASEAN Economics Community: treat or opportunity for Thailand

Abstract

Thailand has the largest area of glutinous rice plantation in ASEAN and holds the ranking as the number one glutinous rice exporting country in the world. This is followed by Vietnam which has increasing world market share. The major cause of such situation is that the production cost in Vietnam or even in an important glutinous rice planting country like Lao PDR is lower than in Thailand. Therefore, the export price of Vietnam’s glutinous rice is lower than that of Thailand by approximately 30-50%. However, most consumers in ASEAN and Asian markets, which account for more than 50% of glutinous rice imports in the world, still prefer Thai glutinous rice due to its unique long and fine rice seeds with softer and better taste than glutinous rice from other sources. As a result, such markets value Thai glutinous rice higher than those of other countries because of these specifications. However, tax measures will be eliminated in the near future due to the participation in the ASEAN Economic Community. This will affect Thai glutinous rice because of the problems of exportation and flow of cheap glutinous rice from neighbors, especially Lao PDR which aims to export over 32,000 tons of good quality glutinous rice in 2013, and this is expected to increase subsequently. As a result, promoting the reduction of Thai glutinous rice production cost at farm level, and conserving good quality Thai glutinous rice become important issues that the Thai government has to emphasize. In addition, Thailand has to expand to new markets in order to reduce the uncertainty of export volume as well.