Traders slam intervention

The government rice-intervention programme "could create a loss of Bt8 billion and may fail to buoy rice prices" after it rejected rice exports under a government-to-government contract with the Philippines, a trader who did not wish to be named said yesterday.

He said it was "expected" that the government could not sell rice at a high price because exporters and millers may not participate in its rice bidding in the future.

The Cabinet on Tuesday approved a Bank of Agriculture and Agricultural Cooperatives plan to spend Bt25 billion to support a government rice-pledge programme.

The price scheme this year would guarantee farmers Bt14,000 a tonne for 2.5 million tonnes of rice.

The trader said the scheme and the cancellation of the Philippines deal had created a "crisis" for the rice industry.

The government would not need to launch the measure if it further negotiated the Philippines contract.

With the Philippines deal, demand would have automatically pushed up local rice prices without state intervention, he said.

"It seems there is a hidden agenda for the government to axe the agreement," said the source, adding: "It is a pity for the rice-trading system. Instead of increasing stability in the market, some influential group with much to gain could have backed the measure," he said.

The Philippines government has proposed to Thailand and Vietnam that it buy 675,000 tonnes of white rice by tomorrow. However, the Thai Cabinet on Tuesday ignored the proposal and instead focussed on the rice-pledging scheme.

Vietnam, however, could enjoy the opportunity to export large stocks of rice to the Philippines.

If the government accepted white-rice prices in the market, they should stay high - between Bt14,000 to Bt15,000 a tonne - without intervention, the trader said.

However the current market price had fallen to Bt10,000 a tonne and even lower because the government lacked adequate "intelligence" to manage the rice system, he said.

Chookiat Ophaswongse, president of the Rice Exporters Association, said the government had made a big mistake by ignoring the Philippines' offer.

He also said exported rice prices had dropped by US$10 (Bt330) per tonne for each kind of rice in the past week. This indicated the government may not be moving in the right direction.

Another source from the rice-trading industry noted the public was closely monitoring the government move. It was reported that the government would soon release of 1.9 million tonnes of rice in its stockpiles under the government-to-government contracts.