Plan to improve all aspects of rice industry in Thailand

The Commerce Ministry will announce a "rice strategy" by the end of this month, aiming to improve the production, marketing and quality of Thai rice, while somehow improving farmers' lives without intervening in the "market mechanism".

Boonyarit Kalayanamit, director-general of the ministry's Internal Trade Department, said the plan was to ensure sustainable development for the entire rice industry from upstream to downstream.

"The rice strategy will emphasise how to increase farmers' incomes while focusing on innovation so that Thailand will be a centre for rice trading in Asean," he said.

The strategy will be outlined to government agencies, the private sector and farmers. It is expected to be ready this month to be proposed to Commerce Minister Chatchai Sarikulya and the Rice Policy and Management Committee.

The strategy is meant to solve long-term rice problems from the production stage to marketing. The government will set up rice-plantation zones while also encouraging farmers to grow other economic crops on land that is not suitable for rice.

The ministry will also support marketing and trading strategies, while avoiding intervention in the market mechanism.

Other strategies include creating fairness in rice trading, enhancing rice standards and the trading system, encouraging more rice consumption, increasing production efficiency, encouraging innovation in the rice industry, and developing the logistics system for rice.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said traders were very worried that the market price for rice will be low during the upcoming harvest season.

Thai rice production in the 2014-15 harvest season is expected to be 24 million tonnes of paddy. India will produce about 103 million tonnes of paddy. As demand for rice consumption in India will be 90 million tonnes, that country will still be a major export rival for Thailand next year.

Vietnam is projected to have output next year of 28 million to 29 million tonnes of rice, of which about 7 million to 8 million tonnes will be exported. Vietnam has also become a major rival for hom mali rice exports to many markets, including parts of Africa. This year, Vietnam could ship 1.2 million tonnes of fragrant rice to Africa, up from 900,000 tonnes last year.

Chookiat said Thailand's large stockpiles would put upward pressure on the competitiveness and downward stress on the rice price in the world market next year. However, this also depends on demand in many markets, including China, the Philippines and Indonesia.