Thai rice struggles to find buyers

Rice buyers remain reluctant to purchase Thai rice even though prices are now competitive with Vietnamese grain.

"This is unusual, as Thai rice prices are now quoted at about the same price as Vietnamese rice," said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association. "The free-on-board prices of 5% white rice, for instance, are only US$420 per tonne, but we still can't find buyers. This has never happened in Thai rice trading."

Mr Chookiat said this could be because rice buyers and traders are betting Thai rice prices will drop further as the Thai government is under pressure to accelerate the sales of its rice stocks to fetch proceeds and honour its payment promises to farmers taking part in the rice pledging programme.

Most who pledged under the main crop are waiting for a late payment, as the government failed to resolve its funds shortage before the House dissolution.

Moreover, the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) has refused to use its own liquidity to advance money to farmers without the National Rice Policy Committee's approval to widen the 500-billion-baht limit on outstanding spending.

The bank also said recently it has a mere 22 billion baht on hand until the end of 2013 to pay farmers who pledged rice for the current main crop, making an extra 51 billion baht necessary to fund the scheme.

Since the main crop began in October, about 5.5 million tonnes of paddy worth 90 billion baht has been pledged. The main crop runs to the end of February.

Mr Chookiat said Vietnam is expected to have a bumper rice crop for the winter-spring season, due to be leased next February, while Indonesia has not shown any intention of wanting to buy rice.

The winter-spring crop is Vietnam's biggest and most of the grain is exported. The harvest often peaks in March.

Vietnam's rice exports between January and November rose 9.7 % from a year ago to an estimated 7.44 million tonnes, the Agriculture Ministry said, led by Chinese purchases. The exports set a record for annual shipments with a month to go.

Thai rice shipments for the year are estimated at only 6.5 million tonnes, far below the 8.5 million goal of the Commerce Ministry, said Mr Chookiat. For the first 11 months, Thailand shipped only 5.9 million tonnes, with shipments in December estimated at 300,000 tonnes.

"This is regarded as a holiday period," he said. "We expect rice trading will become more active from next February."

Share your thoughts

Discussion 1 : 17/12/2013 at 11:05 PM
A scheme to encourage the overproduction of a single crop doesn't work - in Thailand, the USA, ... anywhere! Unless the purpose is to harm the land so that it becomes unuseable in future, that is.
Discussion 2 : 17/12/2013 at 08:02 PM
There is no other place on planet Earth to point the finger of absolute blame. Dubai. As a result I have very strong doubts that Thailand will ever again be in the position of rice production/sales that it had for decades prior to this country gutting of a give away by Taksin.
Discussion 3 : 17/12/2013 at 06:00 PM
Of course! Rice buyers know there are stockpiles of rice around Thailand and in the end will have to eventually sell it at a discounted price. Simple supply and demand. This whole rice subsidy scheme is seriously bad policy. When I first heard about it in 2011 I was beside myself. I thought no government would be crazy enough to go through with this high risk policy. But they did. Governments should stay out of free markets especially staple goods.
Discussion 4 : 17/12/2013 at 09:23 AM
What can All Thai people expect when the rice support scheme (give benefits to rice farmers only as they have the numbers when it comes to voting) is aimed at buying the current government power at election time. Don't worry about the consequence that Thailand may go bankrupt if all the stored rice cannot be sold and perishes or goes missing! Then all Thai people will be equal - POOR and the masterminds get richer with the support of the still poor rice farmers.
Discussion 5 : 17/12/2013 at 09:21 AM
Son Nam Na. Of course nobody wants to buy this Dubai-made scam. Now the stored rice is merely good to feed chickens in the farms.
Discussion 6 : 17/12/2013 at 08:25 AM
This is because the baht is grossy overated and the world knows it.
Discussion 7 : 17/12/2013 at 08:07 AM
could it have something to do with Thai rice not being organic? I don't know about VN rice, but I've seen Thai rice fields being heavily sprayed.
Discussion 8 : 17/12/2013 at 07:04 AM
If I were a rice importer, I would be worried about the age/quality of the rice delivered. 'Old rice in new bags'.
Discussion 9 : 17/12/2013 at 06:43 AM
Surely thaksin's ill thought out rice policy is cause for concern now. This was predictable however, when deciding to hold a perishable product you are at the mercy of the supply chain. If other don't have? You can control the market. But if availability is abundant you have to hold or sell at a lower price.

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