Thailand Rice prices lift as govt retains stocks

Rice prices are gradually recovering on the government's clear plan to stop feeding its inventory into the market. "Rice prices should increase considerably from now, as the government will not release our stocks," Yanyong Phuangrach, permanent secretary of the Commerce Ministry, said yesterday. The market price of paddy rice has crept up by Bt200-Bt300 a tonne. The ministry has responded by lowering its compensation to farmers to Bt994 a tonne this week from Bt1,081 last week. "The government also has a plan to shore up the rice price by allowing exporters to exchange their rice with the government's rice so we can keep good quality rice in stock," Yanyong said. However, the exchange plan may be delayed, as it did not make the agenda for the Cabinet meeting today. The plan would encourage exporters to buy rice from the market, while the government will be able to keep good quality rice in storage, Yanyong said. The government is planning to keep rice in its warehouses for a while to shore up the price in the market. Government rice is about one year old and still of good export quality. Under the government's income guarantee policy, farmers will receive the difference between the guaranteed price of Bt10, 000 a tonne and the reference price. The reference price for this week is set at Bt9,006 a tonne, increasing from last week's Bt8,919. The market price for paddy white rice is currently quoted at Bt8,700-Bt10,100 a tonne. Charnchai Rattananon, president of the Thai Rice Millers Association, said rice prices have been buoyed by the government's intervention measure. He wants the government to stabilise rice prices in the long run so farmers will not suffer again from falling prices and income. The government will not have to spend as much via the intervention scheme if the rice price was down. The government should urge millers to pay Bt300 a tonne more to drive up the rice price, he added.