Commerce Ministry announces plan for provincial rice trading centres

Economy May 23, 2014 00:00

By Petchanet Pratruangkrai
The N

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With no more government price-support measures on the agenda, the Internal Trade Department said it would soon work with rice millers to open trading centres in each province.

“The department will not need to spend a huge amount of money to subsidise rice, but only set up facilities to encourage farmers and millers to meet in each province,” director-general Somchart Soithong said yesterday before the Army took over the whole government.
The Commerce Ministry also decided to cancel the latest sale of 210,000 tonnes of government rice through the Agriculture Futures Exchange of Thailand because the offers were too low. 
Before the coup, millers in 19 provinces agreed with the department to purchase rice from farmers at the market price. The move is aimed at stabilising rice prices.
For the second crop now being grown, farmers in the 19 provinces, mostly in the Central region, were not expected to suffer from bargaining, as the millers had promised to pay them the going price.
The department reports that the current market price for white paddy rice is Bt7,000-Bt7,500 per tonne.
To prepare for the main crop, which will start to be harvested in October, the department will use the same method to ensure stable rice prices in the market.
The department planned to call a meeting soon between millers and provincial officials to draw up plans for the rice-trading centres. Millers would be encouraged to purchase rice at the market price.
To ensure low production costs for the new crop, the department said it would try to persuade farmers to switch to natural fertilisers instead of chemicals.
Farmers need to cut production costs so that they can control their costs, as rice prices are no longer being propped up by the government.
The department also insisted that food and consumer-goods prices were under control by the Commerce Ministry during martial law, although that now is unclear.
Somchart said the department was closely monitoring goods price at present. If any traders unfairly raise prices, they could be subject to seven years in jail and/or Bt140,000 fine. If any hoard goods unreasonably, they would also be subject to five years in jail and/or Bt200,000 fine.
Only powdered-milk producers want to hike retail prices because they face higher import costs, but the department has not yet allowed them to. It asked them to study carefully their cost structure to ensure a low cost of living for consumers.