Ministry sells cheap rice to ease burden

The move is aimed at reducing the burden on domestic consumers but farmers could see falling paddy price.

Thongthong Chandrangsu, deputy permanent secretary of the Justice Ministry, who was named to head the Commerce Ministry's body on the cheap-rice campaign, said the selling price would be adjusted later to be more in line with market prices.

Of the first 100,000 bags, 73,000 will be sold in Bangkok, while the remaining 27,000 will be offered in nine provinces - Chiang Mai, Phitsanulok, Udon Thani, Nakhon Ratchasima, Surat Thani, Songkhla, Ratchaburi, Lop Buri and Samut Prakan. Purchases will be limited to three bags per person in order to prevent price speculation, said Thongthong.

The ministry will also gradually release other stocks of its rice into the market in coming months to ease consumers' burden.

"The government's cost is Bt83.34 per bag, but we also need to take into account market prices and the competitiveness of private rice packers," said Thongthong.

Somroek Tangpiroonthum, president of the Thai Rice Packers Association, said the Bt120-per-pack scheme should not hurt private rice packers since the government's volume is not large.

However, the domestic rice price is expected to soon drop slightly as a result of a fall of 10 to 20 per cent on the world market. Chookiat Ophawongse, president of the Rice Exporters' Association, agreed that the government's cheap-rice campaign should not hurt the domestic market.

 He added that the export price is expected to drop to US$850 (Bt27,000) per tonne from $890 for 100 per cent white rice this month due to foreign buyers' "wait and see" policy, hoping prices will weaken from the previous record highs.