Farmers in Thailand, one of the world’s leading rice exporters, are bracing for an uncertain future as a combination of falling rice prices and potential U.S. tariffs threatens their livelihoods. Daeng Donsingha, a 70-year-old farmer with a family of nine, is among those who are deeply concerned. She has already struggled with the drop in rice prices, which worsened after India resumed rice exports, and now she faces the looming threat of tariffs on Thai rice imposed by the U.S. under President Donald Trump’s trade policies.
“The price of rice is very low, while other costs like fertilisers and farmland rent are increasing,” Daeng explained, standing by a rice mill in central Thailand. “I’m losing money.”
Thailand’s rice industry, which plays a significant role in the Southeast Asian nation’s economy, is under severe pressure. The U.S. is Thailand’s third-largest rice market, but Trump’s proposed 36% tariffs on Thai rice could reduce demand for the country’s most prized export: jasmine rice. Last year, Thailand exported 849,000 metric tons of jasmine rice to the U.S., valued at approximately $735 million.
However, the tariffs could force Thai rice prices to rise by up to 50%, making the product unaffordable compared to cheaper alternatives from competitors like Vietnam. “If the U.S. imposes the tariff, our jasmine rice will be too expensive to compete,” said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association. Vietnamese jasmine rice costs about $580 per ton, while Thai rice could jump from $1,000 to $1,500 per ton.
The combination of this potential tariff hike and the 30% drop in domestic rice prices following India’s resumption of exports in September has placed Thai rice farmers in a precarious situation. With rising production costs and lower yields, many worry they will not be able to stay afloat.
“We have high production costs and low yields,” said Somporn Isvilanonda, an independent agricultural economist. “If we lower prices to compete, farmers will not survive.”
Thailand’s rice exports have already seen a decline, with a 30% drop in shipments during the first quarter of this year. The situation could worsen as other nations hold off on purchasing decisions due to the global oversupply of rice, exacerbated by India’s return to the global market.
In a bid to counteract the tariffs, Thailand is negotiating with the U.S., led by Finance Minister Pichai Chunhavajira. However, any concessions made, such as reducing tariffs on U.S. corn imports, could hurt Thai farmers further. Cheap U.S. corn imports could depress the prices of broken rice and rice bran, which are used as animal feed in Thailand, putting additional pressure on the agricultural sector.
Local farmers have petitioned the government to block U.S. corn and soybean meal imports, arguing that such imports would harm the domestic feed crop market. While the Thai government has assured that it will protect local industries during negotiations, the future remains uncertain for small-scale farmers like Daeng.
“My children have been following the news,” she said with concern. “They were telling me that ‘we won’t be able to survive, Mum, if things go ahead like this.'”
Related topics:
ADM to Close South Carolina Soy Plant
CME Launches New Spring Wheat Futures Amid Tough Competition
