In 2022, Thailand may be at risk of a tighter rice supply, caused primarily by chemical fertilizer prices that have hit multiple record highs amid the Russia-Ukraine conflict. In contrast, there has been pent-up demand seen for rice, as evidenced by higher rice exports, which have in turn pressured domestic rice supply further. This presents a risk to Thailand’s future rice supply, given high uncertainties surrounding a looming global war. Tighter rice supply in the country may not be seen over the short-term.
Looking into 2023, it is expected that such risks will persist due to the protracted Russia-Ukraine conflict, meaning chemical fertilizer prices will remain at elevated levels. Climate change, which is expected to accelerate, along with relatively low rice prices although they have risen somewhat, may not induce rice growers to boost their production. Such factors coupled with a projected decline in Thailand’s rice stocks will likely cause domestic rice output to decline further. Domestic rice output may not return to its normal level in the short-term. Regarding rice demand, although the overall picture may not change much as reflected in relatively low rice exports because of increased competition in global markets, sagging rice production will put Thailand at risk of a tighter rice supply while rice prices will continue to increase from 2022 in line with persistently high production costs.