The government is considering measures to stabilise the price of Hom Mali fragrant paddy about to be released on the market next month in a bid to absorb 2 million tonnes from the main crop.
The measures will include low-interest loans for farmers who agree to store their harvest to delay sales under the massive supply and closer partnerships with exporters to rev up Hom Mali rice exports to target markets such as China, Africa and Asean and promote Thai Hom Mali rice brands.
As part of the measures, which will be submitted for national rice policy committee approval, Commerce Minister Chatchai Sarikulya said his ministry had proposed setting the median price for the new Hom Mali paddy at 15,000 to 16,000 baht per tonne.
The median price was considered acceptable by exporters, millers and farmers after the Commerce Ministry met with them yesterday.
"The median price is much like the suggested price millers should pay to buy the paddy from farmers, while farmers themselves should know how much they should sell without a loss," he said.
However, Gen Chatchai said the duration of the median price depended largely on global market prices.
The government is under mounting pressure from lower farm product prices, particularly for rice, while trying to dispose of massive rice stocks carried over from the previous government.
The new harvest from the main rice crop will hit the market by mid-November.
The Commerce Ministry plans to put another 200,000 tonnes of its rice stocks, mainly white and broken rice, up for auction, possibly this week.
It sold 140,000 tonnes in the first two auctions, raising 1.6 billion baht.
After halting rice sales to carry out nationwide inspections, the junta resumed sales of 167,000 tonnes on Aug 7 from stockpiles the Yingluck Shinawatra government collected under its failed rice pledging scheme.
In July it vowed to sell an average of 500,000 tonnes a month from state stocks, disposing of the existing 18-million-tonne surplus over three years through four channels.
The channels are general auctions, government-to-government sales, direct sales and the Agricultural Futures Exchange of Thailand.
The Agriculture Ministry forecasts Thailand's rice supply for the
2015-16 season at 37 million tonnes of paddy.
Of that, 27 million tonnes will come from the main crop and 10 million tonnes from the second crop.
This translates into 25-26 million tonnes of white rice, beating the 21 million tonnes of white rice projected by the US Agriculture Department from 32 million tonnes of paddy.
The government still holds 15-16 million tonnes in stock, although this represents a large dip from the previous administration.
The supply of Hom Mali fragrant paddy, mainly from the North and Northeast, is estimated at 6 million tonnes.