The rice export sector is being told to brace for impacts caused by the 36% tariff on imports from Thailand announced by US President Donald Trump, while the government is being urged to negotiate for a lower tariff rate.
Chadchawan Phaethayathai, a Roi Et MP of the opposition Thai Sang Thai Party, on Friday predicted a massive impact from the high tariff rate on Thailand's rice export sector, saying hom mali rice, which is very popular in the US, would be particularly hard hit.
As hom mali rice's main export market is the US, at least US$8 billion (274 billion baht) in losses are estimated now, said Mr Chadchawan, who described the situation as a major crisis now facing Thai farmers who form the majority of Thailand's population.
The high tariff rate means the price of hom mali rice from Thailand sold in the US will jump from between US$900 and US$1,000 per tonne to around US$1,400 per tonne, which could make the rice less appealing to price-sensitive buyers, especially when compared with rice from other exporters at a lower price.
"I call on the government to urgently discuss the matter to find a solution to this problem," he said.
He suggested that the government negotiate for a relaxation of the reciprocal tariff or additional benefits for products from Thailand in the Generalised System of Preferences (GSP).
He also recommended that the government speed up expanding rice export markets in Europe, the Middle East and China, among other places, while adding more value to Thai rice through supporting more exports of organic Thai rice.
More importantly, he said, the government would, from now on, have to focus on bringing down the production costs of Thai rice to improve the product's competitiveness in the global market.
The government had better start now as the new rice growing season is due to begin next month. Otherwise, rice prices will plummet during the harvest, he said.
Chukiat Opaswong, the honorary president of the Thai Rice Exporters Association, said that with the 36% tariff rate imposed on Thai products, Thailand risks losing its rice export share in the US market to Vietnam, whose fragrant rice is priced way cheaper than Thai hom mali rice.
Last year, Thailand recorded rice exports to the US of more than 850,000 tonnes, while in the first two months of this year, more than 100,000 tonnes of Thai hom mali rice were exported to the US following news of the imminent reciprocal tariff plans, he said.
Assoc Prof Kiatanantha Lounkaew, an economics lecturer at Thammasat University, said the US has always signalled that it is open to negotiations, while Thailand needs to act fast and efficiently.
To meet the US president's expectations, Thailand urgently needs to craft a clear action plan that can be brought to the negotiating table with the US, while possibly having to demonstrate a greater distance from China to the US.
He also warned that the government should be prepared to tackle an even more serious situation whereby cheap Chinese products could flood the Thai market as a result of China facing high US tariffs as well.
