[Asia Economy Reporter Kwon Haeyoung] Rice prices in Thailand are soaring. Although grain prices, which surged after the Ukraine war, have stabilized, the rise in Thailand's rice prices, a benchmark in Asia, could be a potential signal of food inflation, Bloomberg reported on the 26th (local time).
Recently, the price of Thai rice reached $523 per ton (about 640,000 KRW), the highest since March 2021. Vietnamese rice of the same grade is priced at $458?462 (about 560,000?600,000 KRW), making Thai rice about 10% more expensive.
The increase in Thai rice prices is largely due to countries experiencing supply chain disruptions after the Ukraine war purchasing rice in large quantities as a substitute for wheat. Some consumers also engaged in rice hoarding. Additionally, the strengthening of the Thai baht caused the dollar-denominated rice prices to rise. As the world's second-largest rice exporter, Thailand's rice prices serve as a benchmark for Asian rice prices, thus influencing rice prices in other countries.
Bloomberg stated, "While wheat prices surged sharply in March last year, rice prices remained relatively stable, helping to suppress food inflation in Asia," adding, "The recent rise in rice prices will be unwelcome news for billions of people in China, India, and Vietnam."
The United Nations also emphasized that such a rise in rice prices poses a potential risk to global food security and stressed the need to remain vigilant to prevent price spikes.
However, the Thai Rice Exporters Association forecasted that rice prices will stabilize starting from March. The association explained, "Rice demand was particularly high from Iraq and Indonesia, the largest buyers last year," and "As Thai rice prices surged, new orders have also slowed down." They added, "Rice from China and Malaysia is relatively cheaper and could serve as substitutes," and predicted, "Rice prices will stabilize from March when new crops enter the market."
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