Thailand prics to go up

Rice farmers and the government will soon enjoy better prices due to higher global demand and a shortage in India.

The Commerce Ministry yesterday released the new reference prices for rice for November 16-30 trading.

They are considerably higher than for the first half of the month because of increased demand.

The reference price for paddy white rice is set at Bt8,914 a tonne, against Bt8,389 in the previous round.

"The government will have to pay for a lower gap between the guaranteed price and the reference price, as market prices are rising," said the ministry's permanent secretary, Yanyong Phuangrach.

Under the government's guaranteed-income project, when farmers receive less than the guaranteed price from selling their crops, it will pay the difference between the guaranteed and reference prices.

With the guaranteed price for paddy white rice at Bt10,000, the government will have to pay only Bt1,086 per tonne to farmers under the new reference price.

The reference price for paddy Pathum Thani rice is Bt10,501 a tonne. The government will not however have to make up any shortfall, as this is higher than the guaranteed price of Bt10,000.

However, the reference price for jasmine rice has been lowered from Bt14,840 to Bt13,002 a tonne for the second half of this month, due to higher supply during the current main harvest season.

The guaranteed price for jasmine rice is Bt15,300, meaning the government will have to pay Bt2,298 a tonne to farmers.

However, the price of jasmine rice is likely to increase considerably following higher global demand, said Yanyong.

India has turned from a world supplier to a buyer of rice in order to maintain stocks of about 10 million tonnes. It will announce bidding for more batches in the near future to compensate for the loss of 10 million tonnes due to drought this year.

Usually, India keeps 30 million tonnes of rice in storage to ensure food security.

The natural disasters that have hit many rice-exporting countries have directly damaged their production, while world consumption of the staple is increasing.

Japan and the Philippines have staged rice auctions and China plans to import more rice soon.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said the price of jasmine rice had fallen due to supply increasing during the current harvest season by 15-20 per cent from last year.

High jasmine-rice prices over the past two years persuaded farmers to grow more of the commodity.

Production of paddy jasmine rice is expected to reach 6.5 million-7 million tonnes this year.

Chookiat added that the higher price for paddy white rice was also due to the Philippines opening an auction for 600,000 tonnes of imports next month.