Thailand's rice management committee said on Tuesday it will offer loans worth $1.29 billion to jasmine rice farmers struggling with falling prices, on the condition that they store the grain for six months to slow down market supply. The new rice harvest season is currently underway in Thailand, the world's second-biggest rice exporter, and the Southeast Asian nation expects output of the grain for the 2016/17 production year to come in at 25 million tonnes.
Prices for jasmine rice, Thailand's highest quality rice, have tumbled to their lowest level in years, leaving the military government scrambling to appease the country's farmers. The rice management committee had said on Monday it would offer loans worth $1 billion to jasmine farmers but revised that figure on Tuesday, following an adjustment of the market price of jasmine rice, Commerce Minister Apiradee Tantraporn said on Tuesday.
"Farmers will be eligible for a loan of 13,000 baht ($371.53) per tonne," she said. That figure is up from 11,000 baht ($314.38) per tonne announced on Monday. The 45.3 billion baht ($1.29 billion) loan will be implemented by Thailand's state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC), Supat Eawchai, the bank's assistant manager, told Reuters on Tuesday.
Loans will be provided to 2 million farm households to hold on to their jasmine rice stocks for six months from now until the end of February, Supat said. Prices for Thai 100 percent jasmine rice were quoted at $725 per tonne, FOB Bangkok, on Friday. It was the lowest since hitting $710 a tonne in January 2008, according to Reuters data.
Thai jasmine rice made up 25 percent of Thailand's total rice exports from January to August this year, according to data from the Thai Rice Exporters Association. The commerce ministry said this month its rice export push for the last quarter of 2016 will help support Thai rice prices during the annual harvest period.
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