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.
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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