Thai hom mali (jasmine) rice faces a big challenge to regain market share in Hong Kong and Macau since consumers in those two cities have shifted to lower-quality rice because of high prices and unclear standards, Petchanet Pratruangkrai observed from a market survey last week.

Jasmine rice accounts for half of Thailand's rice-export income even though its export volume is only 1.5 million tonnes. Thailand is the world's biggest rice exporter, averaging 8.5 million tonnes per annum.

Hong Kong and Macau are major importers of hom mali rice. However, standards have been undermined by some importers who mix in lower-grade fragrant rice, sometimes from Vietnam and Cambodia where the price of fragrant rice is much lower, and sell it as genuine Thai jasmine rice.

According to the Foreign Trade Department, Thailand's total rice exports to Hong Kong dropped sharply, by 15.61 per cent, to 179,532 tonnes in the first 10 months of this year. Export to Macau also plunged by 13.14 per cent to 4,125 tonnes during the same period. Jasmine-rice exports to Hong Kong dropped 13.8 per cent to 134,038 tonnes, while export to Macau slumped 20 per cent to 3,541 tonnes in the period.

Commerce Minister Porntiva Nakasai, who led a team to meet with trade associations in these two major markets for Thai rice last weekend, said the government had acknowledged that the country risks losing market share to rivals because of the grain's high price. However, the government cannot control the price, as jasmine rice has increased export incomes.

To solve the price problem, which has encouraged importers to purchase rice instead from Vietnam and other lower-grade suppliers, the ministry is planning to set up a system for marketing different grades of jasmine rice.

Currently, the government allows the export only of premium-grade jasmine rice, which is 92 per cent jasmine rice and 8 per cent other rice grains. Porntiva said the government might consider marketing other grades such as 80-per-cent and 70-per-cent jasmine rice so that Thai rice will be cheaper so as not to lose market share to competitors.

Moreover, the government will set up a campaign and activities to promote Thai jasmine rice to boost export to Hong Kong and Macau by at least 15 per cent next year.

Previously, the export volume of Thai jasmine rice to Hong Kong and Macau averaged 300,000 tonnes. However, exports have dropped to 200,000 tonnes in the past three years.

The ministry has called for Thai restaurants to use Thai jasmine rice and will also set up activities to promote Thai rice in supermarkets and restaurants. The Thai Trade Centre in Hong Kong is planning to promote jasmine rice through advertising on the city's tramlines next year.

The government will also promote other kinds of premium rice such as organic and geographical-identification rice.

According to the survey, Hong Kong and Macau consumers and restaurants still prefer Thai jasmine rice. However, the high price, at more than US$1,000 (Bt32,300) a tonne, has obstructed the growth of exports. Vietnam's fragrant rice, which is mostly imported from Cambodia, is quoted at only $800 a tonne.

The Hong Kong market dropped significantly in the past three years from 80 per cent of total rice exports to 68 per cent. Other rice exporters to Hong Kong include mainland China and Vietnam, with the latter's export share jumping from only 1,250 tonnes in 2007 to 39,061 tonnes in the first nine months this year.

Mutchalin Srirangkoon, owner of Talay Thai Restaurant in Macau, said local consumers and tourists had preferred Thai jasmine rice for a long time, and despite the high cost, her restaurants still imported it from Thailand.

To ensure export growth, the government should increase marketing campaigns for Thai rice and ensure its quality. If the government set up various grades of jasmine rice, , the prices of each variety should be clearly categorised, she said.

Lalida Jivanantapravat, executive director of the Thai Trade Office in Hong Kong, pointed out that the two cities had more than 200 Thai restaurants. There are great opportunities to export rice and other Thai foods to the two markets if the government has clear standards for winning over consumers in the middle and upper classes.

The government must also promote Pathum Thani rice separately from jasmine rice, as consumers have failed to understand the difference, she explained.

Hong Kong consumers have high purchasing power. However, some restaurants may prefer to use lower-quality grades such as Pathum Thani rice or fragrant rice from Vietnam to save costs. The setting up of various standards of jasmine rice should help increase exports, she said.

Source: The Nation