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Published on March 27, 2008

Rice will cost consumers Bt3-Bt5 more a kilogram after the Commerce Ministry committed itself to boosting the local price to the export level for the benefit of farmers.

"We want to give more benefits to farmers while balancing the impact on consumers," said Deputy Prime Minister and Commerce Minister Mingkwan Sangsuwan yesterday. The ministry would also take into account rising fertiliser prices.

Apparently ignoring traders and exporters, all 4.25 million tonnes from the new harvest season will be exported. Some could be bagged for domestic sale, but the price would be equivalent to the export price, Mingkwan said.

Thais currently pay Bt18-Bt25 a kg. If the export price reaches US$1,000 (Nt31,469) a tonne as expected, the local price would start at around Bt25 a kg.

Mingkwan foresees continued hikes in rice prices, with the export price topping the $1,000 a tonne mark. To ensure farmers get the maximum benefit, the Export Promotion Department will work with them in distributing rice directly to overseas buyers.

To help consumers, the ministry will distribute 2.5 million tonnes of rice at last year's cost, when rice was Bt6,600-Bt7,200 a tonne. The rice will be packed in 5kg bags and sold through provincial commerce offices. This will account for 10 per cent of annual consumption, which is 9 million tonnes.

Mingkwan noted that exporters should not be troubled given that they are enjoying higher profits from their inventories.

Meanwhile, he insisted only 13,000 tonnes of stockpiled rice had been stolen, contrary to an earlier report of 200,000 tonnes.  

Skyrocketing prices have sparked demand for rice from Thailand, the world's biggest supplier. During January 1 and March 21, exports reached 2.8 million tonnes, worth $1.22 billion. Compared to the same period last year, volume rose 71.69 per cent  from 1.64 million tonnes while the dollar-denominated value was up 95.94 per cent from $623 million. In baht terms, the export value totalled Bt40 billion, or 84.36 per cent, up from Bt21.8 billion from the same period a year earlier.

Deputy Commerce Minister Wirun Techapaiboon attributed the sharp rise to the increase in average export prices to $433 a tonne, up from $380 million last year.

Petchanet Pratruangkrai

The Nation