The CEO of the Marketing Organisation for Farmers talks about his recent visit to leading Hong Kong rice traders and government officials.
As the world's largest rice exporter, Thailand must continuously promote hom mali or fragrant jasmine rice in order to protect and enhance its markets in growing competitive environments.
With much of the world slowly recovering from an economic crisis, people in many struggling countries are looking to cut costs, particularly for staples such as rice.
High-quality Thai hom mali has always been known by global connoisseurs as the premium rice brand.
At a recent presentation in Hong Kong, Manoorat Lertkomolsuk, CEO of the Marketing Organisation for Farmers, told leading rice traders and government officials that his organisation constantly promotes Thai hom mali rice both internally and internationally.
"We realise that we must always let the world understand why our hom mali rice is still the best rice in the world and demands premium prices globally," he said.
During a luncheon hosted by the Hong Kong Thailand Business Council, Manoorat said people globally still preferred Thai fragrant jasmine rice and Thai white rice in general over other long-grain white rice.
"That's why this year we expect to export between 8 million and 8.5 million tonnes of rice," he said.
However, Thailand's position as the world's largest rice exporter is fast being eroded by competition from neighbours including Vietnam, Burma and to some extent Cambodia.
These countries have primarily exported to price-sensitive areas such as parts of Africa where governments are bargaining hard to drive rice prices lower.
"Many of these countries have bought lower-priced rice from Vietnam during the past year," he said.
The numbers are quite startling.
According to most estimates, last year Thailand exported 10 million tonnes of rice while Vietnam exported only 4.7 million tonnes.
However, because of relatively high Thai rice prices, the Thai Rice Exporters Association's president, Chookiat Ophaswongse, recently said Thai exports would plummet to about 8 million to 8.5 million tonnes this year while Vietnam is expected to export 6 million tonnes.
Even in high-income Hong Kong, which has long been dominated by Thai rice, price competition is seeping into this country's market share.
Kenneth Chan, the Hong Kong Rice Merchants Association's chairman and a leading rice trader, told Manoorat that high prices have reduced Thai rice's market share from 90 per cent to about 80 per cent this year.
"The Vietnamese have taken market share because of lower prices," he said.
Another leading rice trader, Stephan Tan, said large modern-trade retailers are often now using rice as a loss leader to entice people to buy higher-margin products.
"Many of them are therefore always looking to drive wholesale rice prices down," he said.
Manoorat told The Nation that it was critical in the long run for Thailand to continuously reinforce Thai rice's obvious premium qualities, especially hom mali rice.
"The Hong Kong market has always favoured Thai rice, but we must do our job to constantly remind them of its high quality and value if we want to maintain our premium prices," he said.
With a more than 80-per-cent Hong Kong retail market share, Thai rice is still the dominant and most favoured staple.
However, all rice-industry stakeholders, according to Manoorat, must constantly analyse the supply chain and determine where they can do more to benefit Thai farmers and overseas consumers.
"That's why it's so important for us to always liase with overseas rice importers and the market in general," he said.
While Thai hom mali still dominates Hong Kong, Manoorat said the brand's long-term reinforcement in the region and globally is the only way Thai rice will maintain premium prices.
"We want Thai farmers and producers to achieve the highest possible incomes and quality of life," he said.
Source: The Nation
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