Govt op­ti­mistic on rice prices but ex­perts not sure of sus­tain­abil­ity

The Nation - - FRONT PAGE -

THE COM­MERCE MIN­IS­TER is up­beat that rice prices are on the up trend, cit­ing the large num­ber of for­eign­ers plac­ing or­ders, but ex­porters and economists are cau­tious about its sus­tain­abil­ity.

“The price of fra­grant Thai Hom Mali rice has risen fast be­tween Bt16,000 and Bt17,000 per tonne of paddy rice. We ex­pect to­tal rice ex­ports to reach 11 mil­lion tonnes this year,” Son­thi­rat Son­thi­ji­ra­wong said yes­ter­day.

His com­ments came af­ter a meet­ing with 160 rice im­porters from 28 coun­tries. He ex­pected rice im­porters to place or­ders worth about Bt1.5 bil­lion this year and Bt30 bil­lion next year. The Com­merce Min­istry has in­vited rice im­porters to meet Thai­land’s coun­ter­parts, as the min­istry tries to push ex­ports. Key mar­kets in­clude China, Hong Kong, Canada, United States, Europe, Africa, Mid­dle East and Asean coun­tries.

As of Septem­ber, to­tal rice ex­ports in­creased to 8.12 mil­lion tonnes worth US$4.1 bil­lion (Bt135 bil­lion), up 14.13 per cent from the same pe­riod last year. Large mar­kets this year in­clude Benin, the US, In­done­sia, China and the Philip­pines. Hom Mali rice ac­counted for 45 per cent of rice ex­ports, white rice 25 per cent and pro­cessed rice 3 per cent.

“The busi­ness match­ing is aimed at ex­pand­ing rice and re­lated rice prod­ucts to the global mar­ket and to shore up the rice price dur­ing the be­gin­ning of the har­vest sea­son. We ex­pect for­eign buy­ers to place or­ders worth Bt1.5 bil­lion this year and Bt30 bil­lion next year,” Son­thi­rat said. He said on av­er­age the price of Hom Mali rice this year is about Bt16,000 to Bt17,000 per tonne of paddy rice, and in some ar­eas the price has gone up to Bt18,000 per tonne. The price of Hom Mali rice last year was about Bt9,000 to Bt10,000 per tonne.

Charoen Laothamatas, pres­i­dent of Thai Rice Ex­porters As­so­ci­a­tion, said the lower pro­duc­tion of Hom Mali rice due to drought in key ar­eas such as Nakhon Ratchasima, Surin and Si Saket prov­inces played a key role in push­ing the price up this year. The price of Hom Mali rice in the global mar­ket is cur­rently about US$1,100 (Bt36,000) free on board com­pared with the nor­mal white rice’s $390 per tonne. The price of white rice in­creased only slightly to Bt7,500 to Bt8,000 per tonne from Bt7,300 to Bt7,800 last in the same pe­riod last year, Charoen said.

“It is hard to pre­dict the price in the fu­ture, as it de­pends on the de­mand and sup­ply sit­u­a­tion,” he said.

Thai rice ex­porters and im­porters yes­ter­day signed four mem­o­randa of un­der­stand­ing to buy 93,000 tonnes of rice: 759 Store from Hong Kong agreed to buy 10,000 tonnes of Hom Mali and 4,000 tonnes of Pathum Thani fra­grant rice to dis­trib­ute via its 224 super­mar­kets in Hong Kong; Ever­flow­ing For­tune Trad­ing Inc from the Philip­pines agreed to buy 70,000 tonnes of white rice and 5,000 tonnes of Hom Mali rice; Guang­dong You­liang Grain and Oil In­dus­trial Co, a China-based com­pany, agreed to pur­chase Hom Mali GI and or­ganic Hom Mali to­talling 4,000 tonnes.

Look­ing ahead, the price of Hom Mali rice could rise fur­ther and it would also push up the price of white rice, said Sakon Varanuwatana, vice min­is­ter for Com­merce.

He said for­eign buy­ers have high con­fi­dence in the qual­ity of Thai rice, as Viet­nam, Thai­land’s main com­peti­tor, was hit by floods this year.

Farm­ers un­likely to ben­e­fit

Viroj na Ranong, an econ­o­mist at the Thai­land De­vel­op­ment Re­search In­sti­tute, how­ever, was cau­tious about the rise in the price of rice. The cur­rent Hom Mali price is not high when com­pared with the Bt20,000 per tonne due to heavy price in­ter­ven­tion by the Yingluck Shi­nawa­tra ad­min­is­tra­tion. More­over, the global mar­ket for Hom Mali rice is small and the price could swing widely when sup­ply changes a bit, he said. He did not think farm­ers, most of them in the North­east, would ben­e­fit much from the rise in the Hom Mali price, as they are small land­hold­ing farm­ers. The rice mar­ket is very com­pet­i­tive as many coun­tries can grow this sta­ple crop, and Thai farm­ers – es­pe­cially those who grow Hom Mali rice – have low in­come, he said.

Apart from rice, cas­sava is also see­ing ris­ing prices, as pro­duc­tion in Cam­bo­dia was hit by the out­break of a dis­ease. The prices of most farm prod­ucts, in­clud­ing rub­ber and palm oil are low.

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