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Published on April 4, 2008

The ministry does not plan to raise control restrictions against exports but instead foresees that the high price environment will benefit all parties concerned.

Many have urged the government to raise control measures to ease skyrocketing rice prices in the domestic market. Consumers also fear a rice supply shortage in the country caused by increasing demand in the global market.

Commerce permanent-secretary Siripol Yodmuangcharoen said that although consumers may shoulder higher rice prices, the price increase will benefit farmers and the overall economy.

Rice prices are predicted to climb above US$1,000 (Bt31,594) per tonne (for jasmine rice). This presents the country with a new challenge. As a result, the government will closely monitor both supplies and exports to shield local consumers.

Siripol suggested that rice exporters take the opportunity to learn how to bargain for the best price. As the world's biggest rice exporting country, Thailand should create a "rice pool" as a cooperative measure for marketing and export. This would increase bargaining power. Currently, the market belongs to rice traders. On average, consumers spend Bt4-5 for rice a day. Rising rice prices now should only slightly force up spending for rice to Bt6-7 a day, Siripol said.

However, the overall economy will grow as farmers form the majority population of the Kingdom.

Moreover, as the government has a stockpile of up to 2.1 million tonnes, the domestic market should not be affected by skyrocketing rice prices.

Thirty years ago, the world market also faced a rice shortage due to dry weather, while the government did not maintain a stockpile. But the country did not face a crisis as rice could be harvested throughout the year, noted Siripol.

So far, India has imposed a minimum export rice price for non-basmati rice of not lower than US$1000 (Bt31,600) per tonne.

 Vietnam has issued an export ban

due to a climate change problem. Egypt is the latest rice exporting country to suspend rice exports until October this year.

Unlike other rice exporting countries, Thailand will not face a rice shortage problem, thanks to a plentiful rice supply from three to four crops, compared to only one or two of other rivals, said Siripol.

As the world's largest rice supplier, Thailand is expected to export more than 8.75 million tonnes this year, followed by Vietnam, India, the United States and Pakistan.

Asked about a pricing trend, Siripol is optimistic that rice prices should remain high and never turn low as in the past.

"Inevitably, consumers may face higher rice prices because of high demand for the world's consumption. However, we should enjoy long-lasting benefits from higher rice prices as the major rice supplier," said Siripol.

The world will continue to demand higher quantities of rice for consumption while rice plantation areas may be shifted to plant fuel crops.

To insure sustainable development for the country's rice plantations and to remain as the world's largest rice supplier, the government will continue to set strategies to increase rice yield and transfer this knowledge to farmers.

Petchanet Pratruangkrai

The Nation