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CP Intertrade brand to join govt rice auction

ROYAL UMBRELLA, a brand of the country's largest agricultural conglomerate Charoen Pokphand, will join the government rice auction next Wednesday.

"We will join the bidding, certainly. We are interested in jasmine rice, broken rice, white rice, and steamed rice," said Sumeth Laomoraphorn, chief executive officer of CP Intertrade Co.

In past bidding under the rice-pledging scheme for the 2013-14 harvest season, the company won 50,000 tonnes of rice. The price was Bt30 a kilogram.

Sumeth said the government had been gradually releasing rice from its stockpiles since the end of last year, recognising that it could not drive up world rice prices as it had hoped when it set up the pledging programme. Hence the government has been forced to sell rice from its stocks at prices nearly as low as those of Vietnam and India.

Currently, Thai 5 per cent white rice is quoted at US$450 a tonne. The price of Vietnamese steamed rice is $450-$460 a tonne, and India's is only $410 a tonne. Thai broken rice is $310-$320 a tonne, nearly the same as Vietnam's. Thai jasmine rice trades between $400 and $500 per tonne.

Sumeth said the world rice price had been weakening in line with other commodities.

He said Thailand's rice exports this year would improve, probably to between 8 million and 8.5 million tonnes, compared with only 6.5 million to 6.7 million tonnes last year, which would be close to the largest rice exporter, India. Vietnam is expected to rank third among rice-exporting nations.

"We believe that the rice-pledging scheme will eventually be scrapped once we have a new government. It's clear that the scheme is not successful and not influential on increasing the world rice price."

He suggested that the government should subsidise farmers only if the market price falls below the target. It should also buy rice from farmers at a price just a little higher than market. In addition, it could provide financial aid to farmers for their production.

For the stock with 16 million tonne of rice, which is not under the rice-pledging scheme, the government should gradually release by way of selling new rice first in to avoid lowering quality.

"If the weather is normal, the government may take four to five years to release rice from the state stockpiles," Sumeth said.


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