Ministry to keep rice prices steady
The Commerce Ministry is brainstorming policies to stabilise paddy prices ahead of the harvesting season in the third quarter of the year, when 24-26 million tonnes of paddy are due to flood the market and depress prices.
Commerce Ministry Apiradi Tantraporn said the ministry has sent local officials to observe production of the coming 2017/18 main crop as well as to conduct a survey to gauge the need for more price subsidy schemes.
But there will be no more populist schemes as employed by previous governments -- including buying rice from farmers at higher than market prices and keeping it in state inventories -- which later resulted in massive stockpiling costs and added pressure on prices.
"All price stabilising projects are due to be compiled and proposed to the Rice Management and Policy Committee shortly," said Mrs Apiradi, adding that the first lot of rice from the main crop for 2017/18 is due to be reaped in August.
Tentatively, the government plans to use the existing price supporting scheme, for which the state-owned bank offered soft loans with a 3% interest rate to millers and local traders to encourage them to stock up on paddy during the harvesting season, both helping farmers while preventing the crop from flooding the market.
She said most of the relevant parties in Thai industry agreed that the current soft loan project is an appropriate one that will neither create a huge budgetary burden for the government nor result in huge state rice stocks that will put pressure on prices as in the past.
During the previous crop year, the government paid up to 186 billion baht through 19 price supporting measures, in order to prevent prices from falling after refusing to re-employ old-style rice buying schemes.
Mrs Apiradi said the government is unlikely to spend a large amount to support rice prices, with the price already rising and demand expected to be strong. Furthermore, as a major rice exporting country, Thailand now has a very small state rice stock, she said.
Mrs Apiradi said rice demand for domestic consumption and export is forecast at 26.4 million tonnes this year, while supply is expected to reach 29.5 million tonnes.