Flooding: minimum losses at Bt30 bn

After a meeting with rice millers who will join the government’s rice-pledging scheme, Kittiratt said the flooding would not only create huge losses for the farming sector, but also for the property sector and people’s sentiment.
The government will closely monitor the situation and estimate the losses, he said. However, if the flooding can be relieved soon, there should not be an impact on economic growth.
Despite the floods destroying some rice-plantation areas, the government is ready to open the pledging project tomorrow, Kittiratt said.

According to Bank of Thailand Governor Prasarn Trairatvorakul, the initial damage is put at Bt20 billion. He admitted that the floods could take a toll on bank loans next year, which stand to decline due to the euro zone crisis.

Prime Minister Yingluck Shinawatra will today meet with rice millers to explain the pledging scheme, which she will kick off tomorrow at the Commerce Ministry.
However, Kittiratt acknowledged that he had some worries about corruption under the pledging project. The government will closely monitor the programme to ensure that the Bt435-billion budget will benefit farmers, he said.
The government has already forbidden rice movement in 24 provinces bordering neighbouring countries to prevent circumvention of the scheme.
So far, about 667 rice millers nationwide have joined the pledging project.
“The government is 100 per cent confident that the rice-pledging project will take off tomorrow and be operated smoothly,” Kittiratt said.
“All farmers have already registered with the government. About 15 million tonnes of paddy rice from 25 million tonnes are expected to enter the government stockpiles under the pledging scheme.”
He explained that because of the impact from the flooding, and the rising rice price in the market, some rice would be traded normally and the government would not spend as much as previously estimated purchasing rice from farmers.
He added that the government would continue to release rice from its stockpiles under government-to-government contracts and open bidding to general traders. However, it will ensure that the release does not cause a drop in the price of rice.
The Thai Rice Exporters Association reported yesterday that the price of 100-per-cent white rice had dropped from US$627 (Bt19,000) last week to $615 a tonne this week because of lower demand for Thai rice.
The price of 5-per-cent white rice has dropped from $610 to $599 per tonne, while the price of jasmine rice has increased from $1,122 to $1,130.
Export volume in September was up slightly, by 0.77 per cent to 803,771 tonnes. The volume of Thai rice exports in the first nine months of the year grew 47.79 per cent to 9 million tonnes.
Charnchai Ratthananon, president of the Thai Rice Millers Association, said millers were still concerned about the government’s pledging regulations and the fee for polishing rice.
He called on the government to set up clear regulations and fix the rate so that millers can budget their spending and incomes after joining the pledging scheme.