Asian rice: Thai price falls

Thailand's benchmark rice price fell on Wednesday to $660 per tonne, dropping for the fourth week and taking losses to nearly 40 percent since April's record high, as the government delayed a price support scheme. The world's biggest rice exporter had been due to roll out on Thursday a new programme to buy 8 million tonnes but the move has been delayed as the government needs to reconsider the price.
"The committee will meet again on Monday to decide on the intervention price and the start date as many factors have changed," Commerce Minister Chaiya Sasomsab told Reuters. He said the final proposal was expected to be sent to the weekly cabinet meeting on Tuesday, October 21. Traders attributed the fall in Thai rice prices this week to thin demand as buyers held back, waiting for some clarity on government policy.
"Buyers are waiting for a clearer policy on the price-support scheme before deciding whether to buy or not," one Thai exporter told Reuters. The median price of Thailand's 100 percent B grade white rice quoted by Bangkok exporters fell another 2.9 percent to $660 per tonne from $680 last week. It was well below the record high of $1,080 per tonne hit in April and was expected to fall further after the last price support scheme expired on September 30, traders said.
Some believed the price could fall as low as $600 per tonne. The government had approved a plan to pay farmers 14,000 baht ($410) per tonne, well above the market price of 10,000 baht per tonne, for the next paddy crop due to be harvested in November.
But implementation of the scheme has been delayed after exporters complained it could push the price of exported Thai milled rice back up to $700 per tonne, making it harder for them to compete in international markets. Some government officials and exporters said intervention prices should be revised as production costs were likely to drop.
For example, prices of fertiliser, a petrochemical product, were likely to come down in line with oil prices. "It should not be 14,000 baht per tonne, because it does not reflect real market prices. The higher the intervention price, the harder it will be to compete with Vietnam," one trader said.