By ORNICHA Tantiwechwuttikul ID# 5004640669 A research paper as part of EE460: Thai Economy Semester 1/2011 Thammasat University
Abstract
Thailand was hit by the worst flood in 2011 causing vast damage to Thai economy as a whole. The floods have damaged 10 million rai (1.6 million hectares) of rice land, mostly in the Chao Phraya River basin, cutting the main harvest to about 19 million tons from 25.1 million tons and thus causing the reduction about 6 million ton of rice production in 2011. However, this research paper found that the reduction in our rice production in 2011 will be offset by the recovery in the rice growing after the first half in 2012. Moreover, Thailand’s reduction in the world rice export did not cause much fluctuation in the price of the world market. However, this research paper found that the main concern whether Thailand can remain its position as the number one rice exporter is not due to the short-run shock by the flood but rather the competition from Vietnam rice in terms of R&D, productivity, domestic policy and cost factors. Vietnam had gained more and more market share in rice export in the world market since 2005 and already become number 1 in Southeast Asian market and number 2 in the world market. Thus this situation posted the big challenge for Thailand in its long-term policy to cope with such problem in order to maintain the rank as number one rice exporter in the world market.
Key Question: “Can Thailand remain the world’s biggest rice exporter after the flood incident in 2011 and fierce competition from Vietnam rice?” I. Introduction It cannot be denied that Thailand had been the world’s biggest exporter of rice for
References: BioThai Foundation. (2010) Damage to agricultural sector from the flood in 2010 http://www.biothai.net/node/6081 [Access date: Dec 30,2011] Creed Rice Co. (2011) Market Report. http://www.riceonline.com [Access date: January 1,2012] Fernquest J. (2011) The rise of Vietnam Rice, Bangkok Post, January 26,2011 http://www.bangkokpost.com/learning/learning-from-news/218345/the-rise-of-vietnamese-rice [Access Date: October 31,2011] Ministry of Commerce, Trade policy and Strategy Office. (2011) Press release on Thai export, December 20,2011 “Overview on Thai rice” (2000) http://www.foodmarketexchange.com/datacenter/product/ grain/rice/dc_pi_gr_rice01.htm [Access date: December 28,2011] Phatra Securities. (2011) “Flood losses Bt400-530bn”, Thailand Macro Watch, November 4,2011, pp.2-3 Pratruangkrai P. (2011) Rice scheme will hurt Thais and help Vietnam, The Nation, September 5,2011. SCB Economic Intelligence Center. (2011) Thai Rice Focus, SCB “Biz Circle”, June-August 2011, pp.4-6. Shean M. (2011) SE ASIA: Widespread Flooding Impacts Regional Rice Production in 2011 http://www.pecad.fas.usda.gov/highlights/2011/11/SE%20Asia/ [Access date: Dec 30,2011] Suwannakij S. (2011) Thai Rice Exports Seen Plunging 50% on Government Buying Program, Flooding http://mobile.bloomberg.com/news/2011-11-03/thai-rice-exports-to-plunge-on-statebuying-floods-group-says [Access date: December 31,2011] Timmer, C. Peter (2010) The changing role of rice in Asia’s food security. ADB Sustainable Development Working Paper Series, No. 15 September 10, pp.4-5