Rice traders decry new state auction

Rice traders decry new state auction

Meeting will discuss impact of new supply

Rice exporters and millers are calling on the government to shelve the new rice auction, citing sharp price falls in both domestic and foreign markets.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said now was not the right time for the authorities to call for a new auction of state rice stocks.

He pointed out that not only was new supply from the second crop about to be released but also international purchase demand was tepid.

"Any decision to sell rice stocks right now will put more pressure and psychologically affect rice prices, as there are as yet no new purchase orders to support," Mr Chookiat said.

"A new auction, if called, would also affect winners of the previous auctions, as the rice they bought would turn out to be expensive."

He said foreign buyers, notably from Africa, which accounts for 60% of Thai rice exports, had delayed their purchases due to lower oil prices and the weakening of the euro, which is a major currency for trading in many African countries.

Mr Chookiat suggested the government postpone the auctions for a month.

Duangporn Rodphaya, director–general of the Foreign Trade Department, said the panel handling sales of rice stocks chaired by the commerce permanent secretary would meet this Thursday to discuss whether to call a third auction this year.

The meeting will focus on the effect of the new supply from the second crop, which is due to start supplying the market in April, as well as current and future rice prices.

The outcome will be proposed to next Monday's meeting of the National Rice Policy Committee, chaired by Prime Minister Prayut Chan-o-cha.

The government has vowed to dispose of 17 million tonnes of rice in state stockpiles within two years, with 10 million tonnes to be sold this year.

On March 5, it sold 780,000 tonnes in the second auction of state rice this year, fetching more than 8 billion baht.

Last month, the government endorsed the sale of 496,243 tonnes worth 7.85 billion baht in the year's first auction. The ministry has called five auctions since last May, selling a combined 1.12 million tonnes for 13.6 billion baht.

Manat Kitprasert, president of the Thai Rice Millers Association, said the government should think twice about its plan to call for another auction, urging it to take into account several factors including new harvest from the second crop, the strong baht, weak purchase demand and price-cutting by Vietnam and Pakistan.

Rice prices have continuously dropped since last month, especially the price of 5% white rice, which is now quoted at 11,600 baht a tonne, down from 12,300 baht, he said.

Do you like the content of this article?
COMMENT (1)