Govt may freeze stockpile rice sales
GIVEN FLUCTUATING rice prices, currency volatility and uncertainty over the weather, the Commerce Ministry will closely monitor the market situation on a day-by-day basis to decide whether to continue releasing rice from the government stockpiles or to su
Duangporn Rodphaya, director-general of the Foreign Trade Department, said yesterday that with the state still holding a large overall stockpile, the government would consider all factors carefully and monitor the market situation daily in reaching a conclusion on whether it should suspend further sales.
“The upcoming auction for 1 million tonnes of rice could be the last this year before suspending sales for three to four months during the harvest season, which starts next month. However, the ministry will continue to release lower-grade rice that is not fit for [human] consumption, as that would not affect the current crop,” she explained.
Philippines plans to buy
Meanwhile, as the Philippines has recently announced plans to buy 250,000 tonnes of 25-per-cent white rice from abroad, the government will join the bidding, despite the price of Thai rice being considerably higher than the prices offered by the Kingdom’s two major rivals, Vietnam and Cambodia, she added.
Duangporn said the government would hold talks with the Thai Rice Exporters Association about participating in the tender, as the Philippines wanted to purchase new-crop rice.
Thai 25-per-cent white rice is currently quoted at US$388 per tonne, while the Vietnamese equivalent is quoted at $335.
Charoen Laothammatas, president of the Thai Rice Exporters Association, yesterday said the government might need to suspend its rice-release plan for a few months after opening the upcoming round of bidding, as the main crop would be harvested late next month.
About 22 million to 23 million tonnes of rice are expected to enter the market, which would create a high level of supply, while the price of rice is falling because of weak demand in the world market, he said.
Charoen added that he was quite concerned that Thai rice exports would face tougher competition due to low global demand, while the price of Thai rice was much higher than that of its export rivals, and Vietnam in particular, by about $50-$60 per tonne.
The country may need to cut its rice-export projection of 9.5 million tonnes for this year in the next few months, he warned.
Vietnam, which is the world’s third-largest rice exporter, has recently lowered its own full-year export forecast from 6.5 million tonnes to 4.7 million tonnes because of decreased global demand.
Moreover, Charoen said the baht’s appreciation was another obstacle facing Thai rice exporters, particularly in light of the prevailing price difference between Thai and Vietnamese rice.
According to the association, the price of Thai 5-per-cent white rice dropped sharply between August 3 and August 10, from $447 per to $432 per tonne, while the price of equivalent Vietnamese rice was quoted at $350 per tonne.
Chookiat Ophaswongse, honorary president of the association, said the Philippines government’s decision to hold an auction for the purchase of 250,000 tonnes, while welcome, was for much less rice than in previous auctions by one of the world’s largest importers, which were usually for about 600,000-700,000 tonnes.
This all points to a gloomy world-demand situation, which could mean Thailand’s rice shipments this year coming in lower than targeted, he said.
By the end of July, the Kingdom had exported 5.6 million tonnes of rice, while Vietnam had shipped about 2.9 million tonnes.
