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Published on March 27, 2008

The price rise is to offset increasing production costs as the price in the world market has surged sharply this year because of shortages and high demand, Somroek Tangpiroonthum, president of the association, said.

"Last year, we [rice packers] bought one kilo of rice at Bt11, but now the cost has gone up to Bt18.5 per kilo because of rising export prices," he said.

According to the Rice Exporters' Association, the export price for 5 per cent white rice rose sharply from US$359 (Bt11,235) per tonne last year to $544 per tonne in March. The price of Jasmine rice was up from $619 to $771 per tonne.

The rice packs are under the price control products of the Internal Trade Department, which needs approval for price increases.

If their proposal is approved, the price of domestic white rice will go up to Bt100 from Bt90 per 5kilo pack, and Jasmine rice will be Bt140150 from Bt130140 per pack.

Somroek said the government must approve the price hike as production costs have surged but rice packers are having to sell at the former price. Unless the price hike is approved, many rice packers would face difficulties due to higher production costs.

To help low income people, he suggested the government release some two million tonnes of rice in its stockpile by packing rice in small bags to sell directly to consumers.

The Commerce Ministry is also considering selling its rice stockpile of 2.1 million tonnes in the domestic market.

The plan aims to alleviate the high cost of living, particularly for essential foods like rice.

Commerce Minister Mingkwan Sangsuwan said yesterday the ministry would put the rice stock in five kilo bags. It would consider selling it cheaper than the market price.

He said the ministry will announce its rice policy to establish fair practices for all, including farmers, consumers and exporters.

The Rice Exporters' Association reported on March 19 that a tonne of Jasmine rice was quoted at $862, 100percent B grade white rice at $580, 25percent whiterice at $548, sticky rice at $580 and parboiled rice at $612.

Domestic rice prices have also increased in line with export prices. For instance, Pathumthani fragrant rice was traded in the Bangkok market at Bt22,500 per tonne, 100percent B grade white rice quoted at Bt18,400-Bt18,500 per tonne and 5percent white rice sold at Bt17,900-Bt18,000 per tonne.

Petchanet Pratruangkrai

The Nation