Thailand's Rice Prices Rise As Migrant Worker Shortage Slows Exports

Thailand Rice Farmers
Villagers play in the mud during the rocket festival known as "Bun Bangfai" in Yasothon, northeast of Bangkok, May 13, 2012. Thailand has plenty of rice to export. REUTERS/Chaiwat Subprasom

Though Thailand’s coup d'etat has been relatively calm and largely successful in terms of maintaining social order, it's had a profoundly harmful effect on the country's lucrative rice-export industry.

Thailand’s Rice Exporters Association announced Wednesday that severe worker shortages will cause delays in rice export shipments of up to three weeks. A significant portion of Thailand’s migrant worker population from neighboring countries like Cambodia and Myanmar are involved in the grain export industry, and they represent a large majority of the workforce at rice warehouses. The loading rate has slowed significantly, down to about 300 tons of rice a day, compared with the usual shipments of 1,500 tons a day, the shipping director for Thailand’s Chaiyaporn Group said.

The association’s honorary president, Chookiat Ophaswongse, told Bloomberg that as many as 70 percent of the workers involved in the export of rice shipments had left the country as a result of the Thai military seizing power. Political turmoil has sown fear among Thailand’s migrant population, causing concerns about crackdowns on illegal labor and political alliances to flourish.

“The source of the exodus appears to be politically motivated rumors either by ultra-nationalist coup hardliners trying to rile neighboring Cambodia -- long seen as a haven of support for [ousted] Thaksin -- or by pro-Thaksin forces in Phnom Penh trying to stir the cauldron in Thailand to undermine the junta,” Christian Lewis, a Southeast Asia researcher for risk consultancy The Eurasia Group, said via email.

According to U.S. Department of Agriculture data, Thailand is expected to account for 22 percent of all global rice exports this year, which would make it the world's second-largest rice exporter, after Vietnam. The worker shortage has restricted supplies and boosted prices in the near term to a three-month high, Chookiat said. The price of Thai 5-percent broken white rice, a common benchmark for Asian rice prices, rose by 1.5 percent for a third week yesterday, to $398 per ton.

As a prominent rice producer, Thailand's delays could jeopardize the food supplies of several other countries, including longtime importers in Africa, like Nigeria, South Africa and the Ivory Coast. As a result, these importers could potentially look elsewhere to fulfill their needs, allowing nearby competing markets to usurp Thailand’s dominance.

“Nigeria is historically the largest importer of Thai rice, but substitute high-quality exports from India and Vietnam will plug gaps in global supply, and Myanmar may be able to contribute to [the] supply of lower-grade grains,” Lewis said.

 

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