Afet may cut rice stockpile
The Commerce Ministry is considering offering part of its rice inventory for trade in the Agricultural Futures Exchange of Thailand (Afet) to reduce its huge stockpile of the crop, Commerce permanent secretary Karun Kittisataporn said yesterday.
He said such a strategy would create a more effective system to stabilise rice prices, rather than the government's pledging programme. In addition, it will also boost liquidity in the rice trade. The government now handles the remaining stock of 3.7 million tonnes of rice, mainly 100-per-cent white rice and jasmine rice. Karun said the trading of rice in Afet will increase the price and help stabilise it in the future. "Traders will have more confidence purchasing rice through Afet after the government recently announced a policy to decrease the volume of rice under the pledging programme. The government will also create more mechanisms and trading channels to stabilise prices," he said. Two years ago, the ministry considered trading rice in Afet. However, the instability of rice price pledges set by several governments has created risks for rice traders. Only 5 per cent of white rice is now traded in Afet. If the Afet proposal is successful, the government might drop its price intervention programme for rice, said Karun. The government will find new kinds of assistance programmes for farmers such as providing more marketing loans, similar to the United States. The financial support programme will solve the problem of fall in prices when farmers face oversupply, he said. Petchanet Pratruangkrai The Nation
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