After Egypt, Thailand has now come up with an ambitious move to grow Basmati rice targeting West Asia, particularly the Saudia Arabian market.

The development comes on the heels of Bangkok reviving full diplomatic ties with Saudi Arabia recently. Bilateral ties between both nations had been affected for nearly three decades. 

PM’s Chan-o-cha instructions

Thailand’s English daily Bangkok Post said in an editorial “Don’t rush Basmati” that its Prime Minister Prayut Chan-o-cha had instructed “relevant agencies to expand cooperation with Saudi Arabia in the agricultural sector including developing plantations of Basmati for export to Saudi Arabia”. 

It quoted the Thai government spokesman Thanakorn Wangboonkongchana’s statement last week to point out that Saudi demand for the aromatic rice is nearly 30 million tonnes (mt). 

The daily said it was a good move to promote Basmati cultivation in the South-East Asian nation as an alternative crop since it commanded a premium over its flagship Jasmine rice. 

Egypt’s move

The development in Thailand comes nearly 10 months after Egypt said it would try and grow Basmati rice on its farms and market it. Egypt officials, however, did not say if the long-grained rice would be sold within the country or exported.

However, it is a million-dollar question if Thailand can grow Basmati rice. India has got protection through the geographical indication (GI) registered for the fragrant rice, industry experts and analysts said. 

Official sources told BusinessLine that Thailand cannot cultivate Basmati rice as it is “GI-protected”. “We will find the source and take action against them,” said an official, who did not wish to be quoted. 

Evolved varieties

S Chandrasekaran, who has written “Basmati Rice: The Natural History Geographical Indication” book, said the problem for India could be that it is shipping out “evolved varieties” and not traditional ones. 

“Indian Basmati has been losing its premium over the past few years,” he said. 

Getting the GI tag enables countries to prevent a third party from using the tag if the product does not meet the standards. Such protection may not be available for India, as a country which has a GI tag for a specified product cannot stop another country from producing the same product using the same techniques as per the set norms.

“India has not registered for GI in Thailand. In fact, its application for a GI tag is pending in over 15 countries, including the European Union,” Chandrasekaran said. 

The dispute would be more technical than legal and India would have to do a lot of groundwork, he said. 

“Madhya Pradesh has challenged the GI within the country seeking recognition for its Basmati variety,” the expert said, explaining the technicalities of the issue. 

Taking on the US 

Vijay Kumar Setia, former All India Rice Exporters Association president and chairman, Chaman Lal Setia Exports, said India had got GI protection for Basmati rice for the last 20 years. 

“We have the GI protection and have been fighting everywhere for this. Making a statement is different from practice. It will be difficult for Thailand to grow Basmati. Saudi Arabia would prefer Indian Basmati over Thailand’s,” he said. 

Setia said Indian rice had done well to replace the dominance of the US rice in the kingdom over the past 20 years. 

When Egypt announced it would cultivate Basmati, Chandrasekaran had said Cairo could export the long-grained rice to neighbouring Islamic countries, which could encourage such a move. 

In particular, it could ship the rice to nearby countries such as Syria, Jordan, Iran, Iraq, United Arab Emirates and Saudi Arabia. However, it would not be able to export it to the European Union, where India could force the issue through the GI protection, he said. 

Export performance

The Bangkok Post, in its editorial, wondered if Thailand can produce quality Basmati rice and if its production could be “competitive enough”.

It said some Basmati crops were grown in Thailand 20 years ago but it could not be sustained due to a lack of competitiveness and marketing strategies. The daily wondered if Bangkok can compete against India which dominates the Basmati market with 60-70 per cent global market share. 

The daily advocated caution and said the Thai government would need to find answers on making growers understand the nature of the rice variety and finding efficient marketing strategies.  

Agricultural and Processed Food Products Export Development Authority (APEDA) data show Basmati exports were 3.95 mt valued at ₹26,415 crore during the 2021-22 fiscal compared with 4.63 mt valued at ₹29,849 crore in 2020-21. 

During the last fiscal, Saudi Arabia cut Basmati rice imports from India to 0.67 mt from 1.03 mt in 2020-21. It was the second-largest buyer after Iran, which increased its purchase from 0.75 mt to 0.99 mt. 

According to APEDA data, Basmati shipments to West Asia, including the Gulf Cooperation Council nations, dropped to 3 mt last fiscal from 3.51 mt in 2020-21.