Oversupply of rice, the stronger baht, and a shortage of shipping containers are to blame for the falling price of Thai rice which has prompted farmers to demand the government step in to fix the problem urgently.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the falling price of Thai rice was the result of a prediction that the production of milled rice would reach up to 20 million tonnes in the 2021/2022 harvest season due to plentiful water supplies, compared to the 2020/2021 output which was 16.5-17 million tonnes.
"This has put pressure on the rice price," he said, adding the value of the baht, which strengthened between early this year and the third quarter, is another factor that led to higher prices of Thai rice exports and made them less competitive.
Previously, the weaker baht, which depreciated 13% against the dollar this year, resulted in lower export rice prices, making it more competitive against rival exporters. Rice exports have also been affected by a shortage of shipping containers, Mr Chookiat said.
The current export price of Thai 5% white rice is about US$400 (about 13,300 baht) per tonne, compared to $520 early this year, he added.
Every increase in the baht's strength will make Thai rice exports more expensive by $16 per tonne.
However, Mr Chookiat denied a report this was the lowest price of milled rice in a decade, saying the price dipped to 10.50 baht per kilogramme 10 years ago, compared to the current 11-12 baht/kg.
However, this is still much lower than the previous year's 16 baht per kilogramme, he said.
Responding to claims by some politicians that the paddy rice price dropped to 5 baht per kilogramme -- cheaper than a pack of instant noodles -- Mr Chookiat said the paddy price mentioned was from flooded harvests, with 35-36% humidity, higher than the normal level at 15%.
Responding to criticism over the falling rice prices, Deputy Prime Minister and Commerce Minister Jurin Laksanawisit said that previously the prices dropped partly because much of the rice output could not be exported due to the stronger baht.
However, the situation has now improved as the baht is depreciating.
"Therefore, we hope the export figures will improve during the remaining months of the year, which will help release the remaining rice stocks," Mr Jurin said.
Mr Jurin said the Commerce Ministry has come up with measures to help rice mill operators or agricultural cooperatives to keep rice supplies when the prices are low by providing them with 1,500 baht in compensation per tonne.
Meanwhile, Pichet Chueamuangpan, a Pheu Thai Party MP for Chiang Rai, scattered rice during a parliament session to protest against the commerce minister for failing to answer his questions about falling price prices affecting farmers.