FRIDAY, March 29, 2024
nationthailand

High production costs force rice mills to beg for government aid

High production costs force rice mills to beg for government aid

Rice mills are seeking government aid as drought has delayed rice harvests in the Central region, causing an oversupply, which will force mills to purchase more rice than they are prepared for.

Kriengsak Tapananon, president of the Thai Rice Mills Association, said weather conditions in the Central region has forced farmers to sow rice in August, delaying the harvest season to between October and November.

“The price of finished rice may also drop because there will be an oversupply as farmers in the North and Northeast also harvest rice at around October to November every year,” he said, adding that rice mills will need to be financially prepared to purchase the entire harvest.

Also, he said, since rice mills are not producing at their full capacity this year, their earnings have also dropped.

“Rice mills will be producing 50 to 60 per cent less, which means their production costs will rise. Many mills will have to bear a heavier burden, especially the burden of employees’ wages, as they have not laid off any workers. Hence, we are calling on the government to grant loans or postpone the repayment of debts,” he said.

He added that he was concerned about exporters being unable to pay rice mills due to brokers’ default in payment.

Meanwhile, Charoen Laothamatas, president of Thai Rice Exporters Association, said Thailand has only exported 3.3 million tonnes of rice in the first seven months of this year.

“However, we have to monitor the production of rice in the last quarter to see if Thailand reaches its export target of 6.5 million tonnes or not,” he said.

He added that purchase orders for Thai rice were recently low because the price of 5 per cent Thai white rice was around US$500, compared to $478 from Vietnam, $370 from India and $390 from Pakistan.

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