Seventh round of futures bidding sees rice prices drop 10 per cent
March 20, 2014 00:00 By PETCHANET PRATRUANGKRAI THE
THE SALE of rice via the futures market will likely fail to achieve its purpose to help earn more money to shore up the rice-pledging project, after the seventh round yesterday saw rice prices drop by 10 per cent from early this year.
Only seven parties joined the bidding.
The first six rounds were able to release only 390,000 tonnes, generating about Bt4.8 billion, lower than the government’s target to earn about Bt18 billion from selling rice in the futures market.
Sakda Thongpalad, acting president of the Agricultural Futures Exchange of Thailand (Afet), said that because of the worsening drought problem, rice prices should not drop by much in future auctions and traders would demand more rice for security stocks.
The government’s acceleration of its plan to release rice from its stockpiles to earn money for the pledging project has caused prices to fall in the market.
“Afet faces a high possibility of |missing the Bt18-billion target from rice sales after the six rounds of bidding were able to generate only Bt4.8 billion,” Sakda said.
Sales via Afet have earned less because most of the rice was white, which commands a low price in today’s market.
Of the roughly 1 million tonnes of rice sold in the futures market, 94 per cent was white rice and only 6 per cent jasmine rice, compared with the target of 60:40.
For the seventh round, the Commerce Ministry hoped to dispose of 244,000 tonnes of rice, but could find takers for only 105,521 tonnes. White rice was bid at Bt2.48-Bt3.90 per kilogram lower than the market price for delivery. Jasmine rice was bid at Bt5.70 per kilo lower than the market price by only one party.
The market currently quotes white rice at Bt12.70 a kilo and jasmine rice at Bt29.70.
The eighth round is scheduled for March 26 with about 250,000 tonnes of rice going on the block.