Ministry keeps close eye on rice market after postponing auction

Economy April 17, 2015 01:00

By Petchanet Pratruangkrai

The

The Commerce Ministry is monitoring the price of rice in the world market day by day to see when it can reopen bidding this year for government stocks, since it is afraid of hurting the rice price in the local market.



With the sluggishness in global rice trading, local exporters are focusing more on government-to-government contracts, which they see as helping drive shipments for the whole year.

Duangporn Rodphaya, director-general of the ministry’s Foreign Trade Department, says rice trading has been influence by many factors.

Factors affecting sales of rice abroad are global currency volatility, a stronger baht, droughts and monsoons in many producing and importing countries, lower oil prices and the global economic slowdown.

With the global rice market cooling down, the ministry has had to delay the year’s third rice auction from this month.

Commerce Minister Chatchai Sarikulya said the ministry would suspend rice releases via general auctions to ensure stable prices in the market during the second harvest.

Wanlop Pichpongsa, deputy managing director of Capital Rice, one of country’s leading exporters, said shipments this year might rely mainly on G2G deals because of the slowdown in global trading.

Thailand’s rice exports this year will not match last year’s because of many headwinds, while large shipments of rice from the government’s stocks have pressured trading, he said.

According to the Thai Rice Exporters Association, rice exports are projected at about 8 million to 8.5 million tonnes this year.

Sombat Chalermwutinan, president of Asia Golden Rice, said trading would need about a year or two to adjust because of the huge store of rice.

Many traders have had to rely on government contracts as normal rice trading has been tough, he said, adding that the government’s move to unload rice from its inventories has severely disrupted the market.

The government needs to be more careful about dumping huge quantities of rice on the market in order to prevent prices from dropping, he said.