Political turmoil during the recent Nigerian presidential election has been monitored by many countries worldwidebecause Nigeria is the world's 13th largest oil producer, as well as an OPEC member whose production capacity accounts for about 7.8 percent of OPEC output and 3.3 percent of global production. Although the violence seen in Nigeria has not escalated much after the elections on April 16, 2011, there will be some difficulty awaiting the new government relative to reducing tension in oil-rich Niger River delta. If problems worsen there, they could accelerate global oil prices, thus aggravating the current oil crisis and affecting production activity worldwide.This may also affect Thailand's economy with new challenges due to rising costs and export problems from decelerating demand in global markets.
Despite a loose economic relationship between Thailand and Nigeria where Nigeria accounts for only 0.48 percent of our entire exports, KResearch views that Nigeria is a major rice export market and now becomes the top rice export destination for Thailand. Since 2008, Thai rice exports to Nigeria accounted for at least 10 percent of all our rice exports, against 3.1 percent in 2007. As a result, the domestic situation there should be closely monitored because this could hurt trade between Thailand and other African countries, particularly Thai rice exports that may be affected by unrest in both Nigeria and Côte d'Ivoire (Ivory Coast), Thailand's major rice export markets in Africa.
However, it is expected that Thai rice exports to Nigeria will likely grow continuously due to limitations in Nigerian rice production, as well as a close relationship between the two governments based on rice trade that may help drive Thai rice sales higher than rice trade of India, a major rival. In addition, Thai rice exports to other African markets, such as Ghana, Benin, Cameroon and Senegal tends to grow satisfactorily. Thus, Africa may continue to be a major rice export destination.
Meanwhile, there are many other Thai products that can sell satisfactorily in Nigeria because of limited production there, so they must depend on imports in many product categories to support domestic production and consumption. After the situation in Nigeria returns to normalcy, a bright future will lie ahead for many Thai exports, e.g., plastic resin, radio/television receivers and parts, rubber products, automotive vehicles and parts, air conditioners and parts, etc.