Agriculture Min to Address Declining Rice Prices Thailand

The Agriculture and Cooperatives Ministry will issue a reference price on rice according to moisture levels to counter the rapid decline in rice prices during this rainy season.

Agriculture and Cooperatives Minister Theera Wongsamut said the price of rice is on a rapid decline, as the rainy season has caused high moisture in cultivated rice.

The farmers must sell their rice immediately after harvesting, while buyers at rice mills are offering low price.

Theera said his ministry will discuss this problem with relevant agencies in order to find a solution.

The Agriculture and Cooperatives Ministry will announce the reference prices of rice according to the moisture level and will inform farmers of fair prices This will assist farmers when they sell their rice.

A central warehouse may be set up for the farmers to keep their product while waiting for moisture to decrease, before selling rice at a time when it will command a higher price.

The secretary general to the Office of Agricultural Economics, Apichart Jongsakul revealed the drop in rice price is due to high moisture during the rainy season, and a policy by the Commerce Ministry to push for distribution of stocked rice creates a psychologically harmful effect on rice mill owners, causing them to offer low prices to farmers.

Another factor is that the rice mills are waiting to buy high-grade rice cultivated from in-season fields which will enter the market in November.

Apichart suggested the Commerce Ministry postpone the distribution of stockpiled rice and resume it at a better time. During the next year, the price of rice in world market is likely to increase as demand from consumers increases and supply from other rice-growing countries have been diminished from severe changes in climate.

India and China have already halted their rice exports, while Vietnam faces a problem of inadequate supply to meet export volumes designated by trade contracts. While these three major competitors face problems in rice export, an opportunity is available for Thailand to dominate rice exports.

Apichart said the drop in rice prices will cause the subsidy amount the government paid through the price guarantee program to be large.

He added that in order to accurately assess the impact of the price drop, the reference prices, which will be announced in November, must be taken into consideration.

The principle is bigger the gap between reference price and guarantee price, bigger subsidy the government will have to pay. However, he believed the national rice committee will issue measures to increase rice price.

He revealed that at present the official price of normal white rice with 15 per cent moisture is in the range of 7,000 to 8,000 baht per ton, but in reality, farmers can sell this type of rice for only 5,000 baht per ton.

He urged the committee on reference prices to conduct a thorough review before announcing the reference price.

Meanwhile, the general director of the Rice Department, Prasert Kosanvit, said he received a report that farmers can sell white rice with 15 per cent moisture at 8,000 baht per ton.

He suggested the farmers dry their rice and not rush to sell during this time.

He added that the farmers who have registered with the price guarantee program should wait for the announcement of a reference price and sell their rice when the gap between the reference price and guarantee price is wider in order to make bigger profits from the subsidy.