Floods may prove a blessing for rice scheme
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Floods may prove a blessing for rice scheme

The Straits Times of Singapore reported on Saturday that India has overtaken Thailand as the biggest rice supplier to Singapore _ the first time this is believed to have happened.

The paper said Thailand had been the top source of the staple in Singapore since at least 1998, accounting for over half of overall supply between 1998 and 2011. Last year, this fell to 35.3%.

Figures from the government's trade promotion arm, International Enterprise Singapore, show that from January to August, India shipped 92,865 tonnes of rice, or 32.9% of the total, compared with Thailand's 85,816 tonnes over the same period, or 30.4%.

Although the amount of Thai rice supplied to Singapore is now smaller than India's, the value is higher. Singaporeans eat premium grade rice and Thailand's Royal Umbrella brand Hom Mali jasmine fragrant is popular, although it is priced at 15.8 Singaporean dollars (400 baht) a pack compared with India's premium Ponni rice which is priced at S$8.30 a pack of the same weight. So we should take consolation that we have not completely lost out to India.

As the Commerce Ministry has been struggling without much success to unload the huge rice stockpiles said by the ministry to amount to 10 million tonnes _ although the actual amount remains a secret _ the month-long floods could be considered a blessing in disguise, especially for the rice-pledging scheme.

Floodwaters have caused extensive damage to rice crops which are ready to be harvested in the so-called Rice Bowl which covers the Central Plains and the lower northeastern region, well known for Hom Mali rice. That means there will be less rice to be pledged by farmers, and hence less financial burden on the Bank for Agriculture and Agricultural Cooperatives and the Commerce Ministry, both of which have complained about how they can secure the 270 billion baht of fresh funds needed for the 2013-13 harvests.

Less rice to be pledged also means fewer problems with finding space to store the new crops while the old rice stocks remain unsold.

Farmers need to be helped or they will demand help from the government in the aftermath of the flooding. But that is not a problem for the Commerce Ministry to worry about.

There is another piece of good news for the ministry and the government _ at least for publicity's sake. Visiting Chinese Prime Minister Li Keqiang on Friday promised that China would buy one million tonnes of Thai rice over five years. He did not give any details.

Separately, on the same day, a memorandum of understanding was signed between Thai rice exporters and China National Cereals, Oils and Foodstuffs Corporation (Cofco) to buy one million tonnes of rice from Thailand over five years.

But rice exporters are not overly excited with the deal. Chookiat Opaswong, honorary president of the Thai Rice Exporters Association, said the private sector was still wondering whether the deal with Cofco was the same amount of rice China has bought annually from Thailand. He said the deal was unlikely to drive up the price of Thai rice in the world market.

The Cofco deal is separate from the one involving 1.2 million tonnes of rice by China's Beidahuang group that Deputy Prime Minister and Commerce Minister Niwatthamrong Bunsongphaisal claimed was concluded more two weeks ago while he was in Russia.

Then, he said he expected a contract to be signed in two weeks' time. Three weeks have passed and still there is no sign when a contract will be inked. Or indeed any word from the Commerce Ministry about what problems are holding up the deal.

I sincerely hope that the deal _ if there actually is one _ will be endorsed soon so we can make some inroad into the huge rice stocks, and cash will flow in so the BAAC can persist with the rice-pledging scheme without worrying about where to get the money.

The pledging scheme, which the World Bank recently said was costly and had already caused about 400 billion baht in losses over two years, will be the subject of a day-long discussion on Tuesday at Chulalongkorn University.

The discussion is being held to commemorate the 100th anniversary of the birth of Dr Puey Ungphakorn, the former governor of the Bank of Thailand.

The discussion will cover all aspects of the scheme, especially suspected corruption. The speakers include Dr Ammar Siamwalla of the Thailand Research Development Institute, former central bank governor MR Pridiyathorn Devakul, Nipong Wongtra-ngarn, honorary president of the Thai Millers Association, Dr Narong Petprasert and former deputy finance minister Thirachai Phuvanatnaranubala.

Sulak Sivaraksa, a co-organiser of the event, said Prime Minister Yingluck Shinawatra had been invited to attend but she has not given an answer yet.

It would be a pity if the government is not represented in the discussions, especially Mr Niwatthamrong, so that he or another government representative could defend the scheme.

Veera Prateepchaikul is a former editor, Bangkok Post.

Veera Prateepchaikul

Former Editor

Former Bangkok Post Editor, political commentator and a regular columnist at Post Publishing.

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