Rice packers: Prices to climb for months
Levelling-off seen by August or September
The worst is yet to come for consumers, as rice packers warn that packaged rice prices are likely to increase further after domestic rice prices rose by 20-30% since the start of the year, mostly due to drought and a sharp rise in demand in light of the pandemic.
Somkiat Makayatorn, honorary president of Thai Rice Packers Association, said the price of milled rice in the country, which is used as a raw material in packaged rice production, has risen to 15 baht per kilogramme from 12.50 baht in early January.
"The prices of milled rice are expected to continue increasing until August or September before the release of the new harvest into the market," Mr Somkiat said.
He said the worst drought in 40 years is responsible for farmers reporting a decrease of 1.5-2 million tonnes of milled off-season rice this year.
Mr Somkiat said local prices of packaged rice have been capped since last year, with a 5kg package averaging 70-120 baht per pack for white rice and 160-250 per pack for hom mali rice.
Regarding consumers hoarding packaged rice, he insisted that Thailand will never face a rice shortage.
Mr Somkiat blamed the empty shelves at modern trade stores on light inventories at branches that leaves the bulk of supply at distribution centres.
He said that despite the short- term demand surge, domestic rice consumption is expected to drop this year as foreign tourists veer away from Thailand.
Last year domestic rice consumption totalled 7.5 million tonnes, up 8% from the previous year, while Thailand's packaged rice market was worth 30 billion baht, a gain of 8-9%.
This year the market is expected to rise significantly because of higher prices.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said there are several foreign purchase orders, particularly for premium rice such as hom mali, from Hong Kong, Singapore, the US and Canada, as consumers worldwide have rushed to buy milled rice and dried food as the pandemic inspires panic hoarding.
Rice prices are expected to rise until the middle of the year as global consumers beef up their stockpiles, with China unlikely to rev up rice exports in light of the outbreak, Mr Chookiat said.
The free-on-board prices of white rice 5% have risen to US$480 a tonne from $400 at the start of the year.
Thailand is forecast to ship 7.5 million tonnes of rice in 2020.