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Baht/$ 34.24/29 (Bid/Ask)
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WICHIT CHANTANUSORNSIRI
The government could face steep losses on its price guarantee programme for the current rice harvest, the Bank for Agriculture and Agricultural Co-operatives warned yesterday.
Ennoo Suesuwan, a BAAC senior executive vice-president, said the current scheme, covering the second crop from June to the end of this month, represented a special programme under the former Samak Sundaravej government at a time when export prices averaged $900 to $1,000 per tonne.
The mortgage programme as a result set a price of 14,000 baht per tonne of paddy as a floor for the market.
But with current prices hovering around 12,000 baht, the government faces a potential loss of 2,000 baht a tonne for paddy pledged under the programme. As of Sunday, the state-owned BAAC had received pledges of 4.14 million tonnes worth of paddy for 54.1 billion baht.
By the time the programme ends this month, the bank is projected to have accepted mortgages on 4.16 million tonnes of paddy for a total of 54.2 billion baht, just shy of the government's target of 4.5 million tonnes.
Total losses for the government could be reduced, however, under a Commerce Ministry programme to sell up to 2.1 million tonnes of paddy purchased over the past two to three years at a time when prices were below 10,000 baht a tonne.
Mr Ennoo added that authorities were now surveying paddy inventory accepted under the mortgage programme to ensure that rice pledged with the bank met set specifications and standards.
The 14,000-baht price applies only to white rice. Sticky rice, for instance, has a pledging price of 8,000 to 9,000 baht per tonne of paddy.
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