Low rice price may force rice millers to shutdown operations

BANGKOK, 17 June 2015, (NNT) - Thai Rice Mill Association President Manus Kitprasert has expressed concern that the prolonged low rice price in Thailand could force many rice mill operators to exit the market.

Mr. Manus also predicted that the 3rd round of government rice auctions, which would be held soon, is unlikely to attract the attention of entrepreneurs. He attributed the low demand for rice as the main reason behind the low price, despite a 30-50 percent reduced harvest caused by drought.

Of more than 100 rice mill operators affected by the low rice price issue, several have been forced to shut down operations.

Currently, the price of 15 percent water content rice is in the range of 7,500 - 7,700 baht per ton, down from the previous 8,000 - 8,500 baht per ton. Farmers' average selling price is around 6,700 - 7,000 baht per ton.


-- NNT 2015-06-17

We shouldn't feel too sorry for them. I guess many can afford long overseas holidays (where they can access their offshore bank accounts) after all the money they cheated from farmers and stole from the country under the rice scheme.

I saw over the life of the pledging scheme some mills building large new warehouses presumably to take advantage of the large amount of rice in storage and profit from storing it.

These warehouses must now be redundant as will the ones which are at present storing the remaining 16 million tons of rice that has to be sold off for something.

There were stories of the PT Govt paying millers and 'Friends' to build warehouses, for their expectation was that the scheme would continue requiring more storage space.

If this is not true than those who built warehouses off their own bat to store rice from the scheme which was terminated will be looking at a large loss.

They took the money in the very good times,now they are

going to run,

regards Worgeordie

You reap etc..............

The timing seems more than a coincidence, General/PM instructed not to plant at this time due to low water reserves, the farmers told him to jack it because if they plant late they definitely lose their crops from floods. One feels that anything will be done to cut harvest until all stockpiled rice is distributed by hook or crook.

They tried and failed to manipulate world rice prices supported by all their Thaksin cronies.

The rubber barons face the same problems.

Thailand ancient method of producing rice is no longer competitive on the world market.

They took the money in the very good times,now they are

going to run,

regards Worgeordie

Isn't that part of "Thainess"?

Who cares....the less buyers the better in these times........

The farmers are ripped enough.....

Yep. Driving the price up drove competition from new markets. Macroeconomics 101.

Who cares....the less buyers the better in these times........

The farmers are ripped enough.....

You have that one wrong Chris.

The buyers are an important link in the chain from farmer to plate. It is the buyers who have the clients that want the rice and they buy what their clients want.

The farmers sell to the mills who then process (mill) the rice and sell to the buyers who usually have a good relationship with one or more mills which mill the grades of rice their clients want.

One of the stuff-ups of the rice pledging was that the Govt broke the chain and tried to insert itself as a buyer and a seller without having customers to sell to.

The major buyers who were cut out by the pledging scheme still had their customers to buy for so they went elsewhere to buy their rice, India or Vietnam mostly.

Now the Govt, country, has to get those major buyers back so they can get those buyers customers back. As long as the customer is getting a fair deal with the buyer they are confident in dealing with they are unlikely to change without good reason and now several buyers that were once based in Thailand are now established elsewhere and doing quite nicely thank you.

Not every mill and only around half the rice farmers joined the scheme (TDRI report) so there was still rice traded outside the scheme therefore not all buyers were forced to desert ship.

You say the less buyers the better but would you say the same for every type of business where the fewer there are the less competition and therefore easier it is to manipulate prices ?

Who cares....the less buyers the better in these times........

The farmers are ripped enough.....

You have that one wrong Chris.

The buyers are an important link in the chain from farmer to plate. It is the buyers who have the clients that want the rice and they buy what their clients want.

The farmers sell to the mills who then process (mill) the rice and sell to the buyers who usually have a good relationship with one or more mills which mill the grades of rice their clients want.

One of the stuff-ups of the rice pledging was that the Govt broke the chain and tried to insert itself as a buyer and a seller without having customers to sell to.

The major buyers who were cut out by the pledging scheme still had their customers to buy for so they went elsewhere to buy their rice, India or Vietnam mostly.

Now the Govt, country, has to get those major buyers back so they can get those buyers customers back. As long as the customer is getting a fair deal with the buyer they are confident in dealing with they are unlikely to change without good reason and now several buyers that were once based in Thailand are now established elsewhere and doing quite nicely thank you.

Not every mill and only around half the rice farmers joined the scheme (TDRI report) so there was still rice traded outside the scheme therefore not all buyers were forced to desert ship.

You say the less buyers the better but would you say the same for every type of business where the fewer there are the less competition and therefore easier it is to manipulate prices ?

Good point.......maybe I have the impression that the farmers are the victims in most cases.....but I understand your view..thanks

The Millers will look to the Junta to bribe entice them to stay in business. That is, pay them in the form of a subsidy not to withdraw from the Thai rice market. Otherwise, Thailand won't stay #1 as the world's largest rice seller. And that means losing face for the Junta.

Thai farmers know when money is a problem, they can count on "S"ubsidy man Prayut to solve their problems to keep them from any public protest.