Krirkkrai Jirapaet said after a meeting with cassava-root farmers yesterday that the new price would be fair to both farmers and exporters.

"We will not set too high a price like the former government did, because that would result in an accumulation of government stockpiles," said Krirkkrai.

On Thursday, Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula announced the new rice-pledging programme, which offered a level of support much lower than that given to farmers under the government of deposed PM Thaksin Shinawatra.

Although the high price paid for rice scored political points for the ousted government, it ate into the state budget, resulting in large rice stockpiles and distorted market prices.

Krirkkrai said the government would consider both domestic and international market prices before announcing a price for the cassava-pledging programme.

The Foreign Trade Department said the current market price for cassava was Bt1.05 a kilogram.

Cassava farmers from Nakhon Ratchasima and Buri Ram met with Krirkkrai to express their concern about next year's cassava prices. Fearing a reduced price after the government decreased the rice-purchasing price, they called for the government to pledge Bt1.50 to Bt1.60 a kilogram for cassava.

Tapioca exporters, however, called for the government to set a price of Bt1.30 to Bt1.50 a kilogram.

The ministry predicts cassava production will increase 12 per cent to 25.29 million tonnes next year. Cassava production this year was 22.58 million tonnes.

Thai Tapioca Trade Association chairman Niyom Chulaserikul said the government should not set a price higher than Bt1.40 a kilogram, or else that would decrease Thailand's export competitiveness with Vietnam and Indonesia.

"If the government sets a high price, exports will drop," he said.

Foreign Trade Department deputy director-general Vichak Visetnoi said exports of tapioca, which is obtained from cassava root, should increase significantly next year, due to high demand in major markets.

Vichak said China, the biggest importer of Thai cassava, would demand more for ethanol production. The European Union is also expected to import more cassava next year.

The value of Thailand's exports of tapioca products grew 27.6 per cent to US$807 million (Bt29.75 billion) in the first nine months this year. Export volume increased 30 per cent to 4.86 million tonnes in the same period.

Meanwhile, Krirkkrai said the government's price for the rice-pledging programme was the most suitable one.

He said farmers could write to the government to ask it to revise the rice price. However, the announced price will help the government release rice stockpiles and stabilise future rice prices.

Petchanet Pratruangkrai

The Nation