Traders condemn rice plan

Traders and exporters are of the same opinion, that now is not "the right time" to release huge stockpiles of rice, because prices are continuing to fall, and the move can only hurt the country's rice traders.

Earlier this week, the National Rice Policy Committee approved the release of up to 2.1 million tonnes of rice from government stockpiles, which are held in warehouses nationwide, as a measure to clear the way for fresh government stockpiles under its new riceintervention programme.

Thai Rice Exporters Association president Chookiat Ophaswongse said the government should reconsider the move, because it would not only hurt rice exporters, but also send the wrong signal to the market.

"Importers will prolong their rice orders and play games to ensure that rice prices continue to drop. Then they'll reap benefits from huge rice stockpiles entering the market," he said.

Although the government will release its stockpiles only for governmenttogovernment contracts and not directly to rice millers or exporters, it will still affect the market by suggesting a situation of higher supply and compete with normal rice trading, Chookiat said.

As of Wednesday, the price of jasmine rice was $955 (Bt32,000) per tonne. It had fallen from $992 in only a week. Regular white rice fell from $834 to $814 in the same period.

Chookiat said rice prices could be expected to fall further if the government insisted on releasing its stockpiles.

Moreover, a big price gap between Thai rice and that from Vietnam is also hurting Thai exports, Chookiat said. Vietnamese white rice is being quoted at less than $600 a tonne, whereas Thai rice is being offered for $798 a tonne.

Buyers may not be interested in the government's rice at the high price, so it may not get a good return for its stockpiles, he said.

Wanlop Pichpongsa, deputy managing director of Capital Cereal, Thailand's largest rice exporter, said this was not the right time to release rice from government warehouses. Such a release will dampen rice prices, which are already falling because of lower world demand.

Sompong Kitireanglarp, president of Ponglarb, Thailand's thirdlargest rice trader, said rice trading was proceeding normally at present but that the government's decision to release its stockpiles would hurt the market mechanism, and that would hurt Thai rice prices in the long run.