Market mechanisms and an oversupply of rice, especially a certain Vietnamese variety, are contributing to the sharp drop in the rice redemption price for the upcoming farming season, which starts in April, says the Thai Agriculturist Association.
During the first crop season of the year, which ended in February, huge demand for rice led to an escalation of the redemption price in the central market from 7,000–8,000 baht to 12,000–13,000 baht per tonne, the association's president Pramote Charoensilp said, adding that it was the highest in a decade.
However, the price has dropped lately, causing farmers to fret as the second crop season is about to begin.
One of the main factors, Mr Pramote said, was the popularity of the Vietnamese rice variety known as Khao Hom Phuang, or jasmine 85, which yields a high volume, only requires a short growing period and is highly weather-resistant.
A million rai of rice plantations in Thailand are estimated to be growing Vietnamese rice this season, he said.
However, according to a source from the Thai Rice Mill Association, that variety has a dull-white hue and is damaged easily during the milling process.
The association has warned farmers not to cultivate it because rice mills and exporters shy away from it, he added.
The Thai Agriculturist Association has urged farmers not to cultivate foreign rice varieties to prevent negative effects on local cultivars, said Mr Pramote.
Director-general of the Rice Department (RD) Natthakit Khongthip said none of the Vietnamese rice varieties have been registered with the department yet.
"Thailand does not produce enough rice grains to meet farmers' needs. That causes them to seek foreign alternatives, especially the Vietnamese variety, which provides a high-volume yield but requires a shorter farming time," he said.
Mr Natthakit said RD is attempting to improve local breeds to help Thai rice regain its popularity, but challenges lie ahead.
The Thai Agriculturist Association urged the Department of Internal Trade to investigate if there are any other factors that have caused the price to drop and investigate the source of foreign rice grains being cultivated in Thailand, Mr Pramote said.