"The baht keeps getting stronger every day. Thai rice exports will be badly hit because every one-baht appreciation against the dollar pushes up rice export prices by $25 a metric ton," Chookiat Ophaswongse, president of the Rice Exporters Association said, adding that exporters are finding it difficult to quote prices.
The Thai baht has risen by 6.2% from the end of last year, with the U.S. dollar quoted at a 10.5-year low of THB31.58 Monday. The baht could appreciate to THB30 against the dollar within a short period following the central bank's removal of the capital control rules as foreign investors and speculators will pour money into the country, Chookiat said.
Another factor that could slow rice shipments in the second quarter is that local rice millers and merchants continue to hoard stocks in anticipation of higher prices, leading to tighter supplies and preventing exporters from taking large orders.
Moreover, Thai exports will face tougher competition as offers for Thai rice are higher than Vietnamese rice by around $30-$60/ton, free-on-board, he said.
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