Rice price may spike next year due to decrease in production

[webfact]

Rice price may spike next year due to decrease in production

By THE NATION

 

 

Speaking after a meeting with the rice price guarantee committee, the Department of Internal Trade’s director-general Wichai Phochanakit revealed on Wednesday (November 27) that 90 per cent of the rice grown in crop year 2019/2020 had been harvested, but the volume had decreased drastically due to drought and floods.

 

“In-season paddy rice volume decreased from 27 million tonnes to 24 million tonnes, while off-season paddy rice also went down from 8 million tonnes to 3.5 million tones,” he said. “This means that we will have only 16-17 million tonnes of milled rice. Since 8 million will be earmarked for export, only 9-10 million tonnes will be left for domestic consumption. This will certainly drive up the price of milled rice next year.”

 

 

Wichai added that the committee has considered paying rice farmers the difference between the reference price and guaranteed price as follows:

 

Unmilled round shaped rice’s reference price is Bt7,446.61 per tonne, lower than guaranteed price of Bt10,000 per tonne, a difference of Bt2,553.39 per tonne; unmilled Hom Pathum Thani rice’s reference price is Bt9,404.32 per tonne, lower than guaranteed price of Bt11,000 per tonne, a difference of Bt1,595.63 per tonne.

 

Meanwhile, the rice varietals that require no difference payment are: unmilled Hom Mali rice (reference price Bt15,286.95/tonne, guaranteed price Bt15,000 per tonne), and unmilled sticky rice (reference price Bt16,186.25/tonne, guaranteed price Bt12,000/tonne).

 

Source: https://www.nationthailand.com/news/30378838

 

-- © Copyright The Nation Thailand 2019-11-28

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[lujanit]

Thailand still has to compete with India, Vietnam and China. The strong baht will be the deciding factor.

 

Do I smell another guarantee rice con job on the horizon?

[kelboy]

And they get paid for that cr p .

[holy cow cm]

Now comes the hoarding of the rice to drive the price and demand up. Something really is going to stink here for lining someone's pockets. Thailand really gonna hurt on this one. Sticky rice remains super high and no sight in coming down.

[Thian]

Why don't they import rice from their neighbours which is much cheaper?

[Scot123]

Every year it feels like since the tanks rolled in the "D" ear General stops farmers planting second crops and they wonder why rice production is down? Mmmmm let me ponder that a while!!! I always wonder if the government compensates farmers for not planting crops as the dictate? 

[Srikcir]

6 hours ago, webfact said:

Since 8 million will be earmarked for export, only 9-10 million tonnes will be left for domestic consumption. This will certainly drive up the price of milled rice next year.”

Which means regardless of any impact on the global price, the domestic price will rise.

That in turn puts further inflationary pressure on the Thai economy.

Combined with a "hot" baht and slowing GDP growth, the Thai economy for 2020 at best might stall if not at worse continue to contract.

 

[Srikcir]

6 hours ago, webfact said:

Wichai added that the committee has considered paying rice farmers the difference between the reference price and guaranteed price as follows:

 

Unmilled round shaped rice’s reference price is Bt7,446.61 per tonne, lower than guaranteed price of Bt10,000 per tonne, a difference of Bt2,553.39 per tonne

This is the first I've seen the term "reference price" but given that the guaranteed price is higher, I assume reference price is the market price? If that's the case then in this example the government is providing about a 35% subsidy. That would amount to a very desirable profit margin, albeit at the taxpayers' expense. 

[Don Aleman]

And now Vietnam rice rated Number 1 plus 1/2 the price of Thai Jasmine so who will buy it ?

[Isaan sailor]

The high Baht affects everyone—except HiSos.  Someday, central bank will take drastic action.  Right now, they keep their game face on, and monitor the Baht closely...

[hotchilli]

10 hours ago, lujanit said:

Thailand still has to compete with India, Vietnam and China. The strong baht will be the deciding factor.

 

Do I smell another guarantee rice con job on the horizon?

Didn't they just do a deal to sell thousands of tonnes to China?