Rice prices have declined over 20% in 9 months because:

• Thailand has 12.8 million tonnes of rice in stock – a 1/3 of the total global export market
• In 2011 Thailand had only stockpiled 5.8 million tonnes
• Rice is a perishable good (something the government may have forgotten) and can’t just sit in a warehouse for years
• The government has basically run out of ways to pay farmers
• So…they’ve doubled the monthly exports to 1 million tonnes per month from 558,000 tonnes last year
• Impact of all this? Rice prices may continue to tumble, the farmers may eventually get paid, Thailand may become #1 in the world again for rice exports
• Everyone will forget about the rice issue by the end of the year.

Image Source: Indexmundi.com

Article Source: Bloomberg