Exporters to hoard rice

Rice exporters have agreed to buy 200,000 tonnes of Hom Mali fragrant rice and store it in warehouses during November and December, the period when new supply from the country’s annual harvest season starts flowing into the market.

According to Commerce Minister Apiradi Tantraporn, who called an urgent meeting with rice exporters yesterday, shippers are ready to cooperate with the government in dealing with the possible impact on domestic rice prices as the new harvest enters the market.

On Thursday, the government announced a pause in its efforts to dispose of state rice stocks to curb any adverse impact on domestic prices.

According to Duangporn Rodphaya, director-general of the Foreign Trade Department, with the annual rice harvest season beginning earlier, rice sales must be held cautiously and authorities are now studying proper periods and types of grains for disposal, while adjusting criteria to comply with changing conditions.

The government now controls 8.4 million tonnes, of which half is good-quality rice and the rest suitable for industrial use.

Thailand is forecast to produce 23 million tonnes of paddy in the main harvest season. The supply will gradually enter the market from late September onward.

Since the May 2014 coup, 8.6 million tonnes of rice have been sold in 18 auctions, fetching 89 billion baht. Government-to-government rice deals have unloaded an estimated 3.8 million tonnes worth 50 billion baht.

The government-to-government rice deals exclude August’s winning bid to supply the Philippines with 100,000 tonnes, 25% of which is due for delivery this month or in early November.

According to Mrs Apiradi, the Commerce Ministry authorities are scheduled to lead public and private delegations to visit key potential buyers such as Indonesia, Malaysia, China, Hong Kong, Singapore and the US on Nov 13-15.

Charoen Laothamatas, president of the Thai Rice Exporters Association, said Thailand is expected to produce up to 9.5 million tonnes of Hom Mali rice this year — higher than the normal production of 6-7 million tonnes.

He voiced concern that higher production could put downward pressure on Thai premium rice prices, now quoted at US$600-650 a tonne.

According to Mr Charoen, the association’s members will start buying Thai premium rice from Nov 1 to Dec 15.

Exporters will ask for the government’s financial support in interest rate subsidies and warehousing fees worth a combined 60 million baht, he said.