Thailand is likely to lose more rice sales to Vietnam in Asean countries once the Asean Economic Community (AEC) takes effect in 2015, warns an academic.

If the 10 Asean member countries remove all import tariffs on rice in 2015, Thailand's main rival will certainly be more successful in the Philippines and Malaysia, two major rice markets for Thailand, said Aat Pisanvanich, director of International Trade Studies at the University of the Thai Chamber of Commerce,.

He said Vietnam had been the largest rice exporter to countries in Asean since 2005 with the value of US$1.3 billion in 2009, compared with $316 million by Thailand in the same year.

Vietnamese rice has a market share of 79.4% in Asean compared with 19.2% for Thailand.

He said the quality of Thai and Vietnamese rice was not very different but Vietnamese traders charge about $125 per tonne less. As a result, he said, Thailand would be better off aiming for the high-end market and also creating greater awareness of the quality of Thai rice so that potential buyers in Asean can detect the difference.

"It will be hard to compete with Vietnam in the Asean market as Thailand needs to reduce the cost while increasing yields," said Dr Aat.

Thailand's average yield per rai is still low at 452 kilogrammes while Vietnam can produce up to 800 kilogrammes of rice per rai.

Source: Bangkok Post