Local rice prices set to increase

Local rice prices set to increase

Drought to cut into packaged output

Marketing Organisation for Farmers put quality rice for sale while Bank for Agriculture and Agricultural Cooperatives set up a booth for people to deposit in the fund to help farmers at Or Tor Kor market in March 2014. (Bangkok Post file photo)
Marketing Organisation for Farmers put quality rice for sale while Bank for Agriculture and Agricultural Cooperatives set up a booth for people to deposit in the fund to help farmers at Or Tor Kor market in March 2014. (Bangkok Post file photo)

Consumers are warned of a possible rise in the price of packaged rice as a dip in white rice output may lead packers to push for the increase over the next few months.

Somkiat Makayathorn, president of the Thai Rice Packers Association, said over the next three to four months, particularly in August and September, rice packers may ask for a higher price if new supply is relatively weaker following the effect of the widespread drought.

"We are closely monitoring the prices of paddy and white rice, which started picking up since earlier in the year," he said.

Mr Somkiat said the higher cost of raw materials has led rice packers to expect to be able to maintain packaged rice prices for the short term.

"Based on existing rice stocks, we expect packers could maintain current prices until September at the latest," he said.

The price of packaged white rice is now quoted at 70-80 baht per five-kilogramme pack, while that of Hom Mali fragrant packaged rice is 170-180 baht per five-kg pack.

Manat Kitprasert, president of the Thai Rice Millers Association, agreed the widespread drought and volatile weather will sharply cut rice output this year.

He predicted milled rice prices to rise further after increasing to 14,000 baht a tonne in May from 12,000 baht earlier in the year. Paddy prices rose from 9,000 baht a tonne to 9,400 baht over the same period.

Benchmark Thai rice prices hit a two-year high last Tuesday as the drought cut output from Asia's top rice growers and stoked demand for Thai exports. The price for 5% white rice was quoted at US$424 a tonne, up from $397 in April, and the price for glutinous rice was quoted at $900 a tonne, up from $867 last month.

The free-on-board export price for Hom Mali fragrant rice remained stable at $795 a tonne.

"Rising rice prices will likely only benefit farmers slightly, as most suffered losses from previous seasons because of drought," said Mr Manat. "The current rain showers are unlikely to be sufficient for rice farming."

In related news, Commerce Minister Apiradi Tantraporn yesterday said the ministry is committed to continuing helping low-income earners with their cost of living through the Thong Fa (Blue Flag) scheme that sells low-priced products in crowded communities and via wider promotion of low-cost department stores and food outlets.

More low-cost food outlets are planned after the ministry reached its goal of 10,000 on May 19, she said.

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