A major rice exporter has found it harder than ever to do business due to volatile price swings and tight supply

After doing business for nearly a century, Kamolkij Group, one of Thailand's leading rice exporters, now sees itself as riding on a tiger's back, where no one has choice but to ride on.

Low margins, growing competition and market volatility have kept away most of the allure of trading the commodity, which earns the country an export income of over 100 billion baht a year, said the executives of the company.

Korbsook Iamsuri, the CEO of Kamolkij Group, said rice prices had been volatile for the past few years and the tight supply for exports had further exacerbated the situation.

The domestic price of a 100- kilogram sack of white rice rose 16% to 1,400 baht this week, from 1,170 baht quoted early in January. The price of Hom Mali fragrant rice also shot up by 200 baht from last month to 2,300 baht.

Though soaring prices have benefited farmers, the rapid jump could hurt exporters, she said.

The price fluctuation has kept away exporters from making long forward sales, restricting themselves to approving orders of only one month in aim to avoid possible losses. Meantime, the increasing prices not only leave them with smaller margins but also could cause them to default on their orders and eventually damage the country's reputation as the world's largest rice exporter, she said.

According to Mrs. Korbsook, many exporters are now feeling the pinch and agree it is hard to manage a rice business these days.

According to her, the rice business is a family heritage that has to be kept alive since a large number of employees’ lives depend on it.