By Petchanet Pratruangkrai
The Nation
Thai rice exports will suffer this year, with prices set to decline into
next year from increased supply in the world market and bearish demand,
a seminar heard yesterday.
Moreover, Thai rice trading will face more problems due to insufficient
development of both crop production and irrigation. Several recent
administrations have been unclear on development of a sustainable rice
policy.
The crop is a major export for the Kingdom.
At a seminar yesterday hosted by Thai Rice magazine entitled "Rice Price
Trends: Reduced Risk for Coping with the Global Crisis", traders,
government officials and economists said the price was set to drop
slightly into next year, due mainly to a combination of lower demand and
greater supply.
Thai Rice Exporters Association president Chookiat Ophaswongse said more
rice exporters had entered the market this year.
"Burma and Cambodia have started exporting large amounts of low-grade
rice for less than US$300 [Bt10,200] per tonne to the world market.
"India will soon export up to 3.5 million tonnes of rice from more than
20 million tonnes stockpiled this year," said Chookiat.
Greater supply in the world market and bearish demand during the world
economic slump will pull down rice prices, he said.
Chookiat said the government's recent decision to sell off large volumes
of rice via bidding caused Thai prices to fall.
Before the bidding, Thai rice was quoted at $530 a tonne in the world
market. Now it is down to $490 a tonne.
Last year, India suspended rice exports, because of a domestic shortage
problem. Burma exported up to 700,000 tonnes of 25-per-cent white rice
in the first four months of the year.
Thailand Development Research Institute president Nipon Poapongsakorn
told the seminar he, too, believed the rice price would fall gradually
until next year.
"The world economic slowdown has meant lower demand for rice. Lower oil
prices, which affect crop prices, will also ensure the rice price
remains unchanged or decreases slightly in the second half of this
year," said Nipon.
However, some factors could actually cause a slight increase in the
price, such as increased demand in certain markets. These could include
major rice importers Indonesia and the Philippines.
Commerce Ministry permanent secretary Siripol Yodmuangcharoen said not
only India would become an important rice-export rival of the Kingdom,
but also Pakistan, which is set to export up to 4 million tonnes this year.
Kwanchai Gomez, secretary-general of the Thai Rice Foundation under
Royal Patronage, said uncertainty about the rice price would be
prolonged as long as development of rice production and quality was delayed.
This will also result in a huge cost burden for farmers.
She said Thailand's rice production must be developed to meet a
particular quality and yield per rai.
"Thai farmers have long suffered from low incomes and little management
expertise.
"The government must focus on providing knowledge to newer generations,
to ensure the development of rice farming, as well as the creation of
sustainable incomes to increase the quality of life for rice farmers,"
she said.
Thai Farmers Association president Prasit Boonchuey said instead of
losing more than Bt20 billion in a pledging scheme, the government
should consider investing Bt10 billion each year for the sustainable
development of rice farming, production and irrigation.
He said rice-price volatility was connected to the world market and
middlemen.
Rice farmers have always experienced unpredictable rice prices, even
during the pledging scheme. The government must establish a long-term
agenda to ensure long-term sustainability in rice trading and prices,
Prasit said.
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