Key rice exporter Thailand moves to lift prices

Published : October 08, 2011 :: 10:10:40 [ 1,316 views ]

BANGKOK, October 7, 2011 - Thailand introduced a new rice price scheme Friday that aims to boost farmers' incomes but has raised concern the food staple will become more expensive on global markets.

The programme, which lifts the price that farmers receive from the government by about 50 percent, was one of the main electoral pledges that helped sweep Prime Minister Yingluck Shinawatra to victory in July polls.

“We’ve been selling our rice too cheaply. This time we will sell at the actual cost plus a small profit,” said Charnchai Rakthananon, director of the Thai Rice Mills Association.

“We have been covering the loss so the world can eat cheap rice.”

But the Thai Rice Exporters Association, concerned that the country could lose out to competitors, has warned that the price of Thai rice could hit $800 per tonne on world markets, up from about $600 in recent weeks.

“We cannot sell at $800 because no one will buy,” said the group’s honorary president Chookiat Ophaswongse.

The government says the move will not affect the kingdom’s dominant status in the market and will benefit 3.7 million farming households.

The initiative is expected to get off to a slow start, following widespread floods that have inundated swathes of the country and damaged about 10 percent of rice paddy in Thailand, the world’s top exporter.

Rice is the staple food for more than three billion people, about half the world’s population, and Thailand produces about one third of global exports.

The rice project is similar to one set up under Yingluck’s older brother Thaksin Shinawatra, who was ousted in a 2006 coup and lives abroad to avoid a jail term for corruption.

On the eve of the launch of the new scheme, an opposition lawmaker showed a video clip purporting to show army officials involved in smuggling rice from Cambodia to sell to the Thai government at the increased price.

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