Thailand's Rice Exports Forecast to Decline in 2026

Economic Factors Driving Decline

Thailand's rice exports are expected to experience a significant decline in 2026, with projections showing a 12.5% drop to 7 million metric tons compared to the estimated 8 million tons in the current year. The Thai Ministry of Commerce attributes this decline primarily to the appreciation of the Thai baht and increased competition from Indian rice supplies in the global market.

The Thai baht has strengthened by 10.5% against the US dollar year-to-date, positioning it as the second-best performing currency in Asia. This currency appreciation has reached its highest level against the US dollar in over four years, compounding the challenges faced by Thai exporters. The stronger baht makes Thai rice more expensive in international markets, reducing its competitiveness.

Challenges Compounding Export Decline

The decline in rice exports comes as Thailand faces multiple economic challenges, including the impact of US tariffs, high household debt levels, border conflicts with Cambodia, and political uncertainty preceding the general election in early February. These factors collectively contribute to a challenging business environment for Thai exporters.

The increased presence of Indian rice in the global market further intensifies competition for Thai rice exporters. As major rice-producing countries adjust their export strategies, Thailand must navigate these challenges to maintain its market share.

Implications for Thailand's Economy

The projected decline in rice exports has significant implications for Thailand's economy, particularly as the agricultural sector remains a crucial component of the country's economic landscape. The government may need to consider policy measures to support farmers and exporters, potentially including currency hedging strategies or export subsidies to maintain competitiveness in the global rice market.