The Thai 200,000 ton Rice Mistery

Continued increasing rice prices in the Thai market have prompted numerous farmers and middlemen to slow, stall or altogether stop selling paddy rice to millers, a move which eventually affects exporters, according to a Bank of Thailand (BoT) official who is deeply acquainted with the rice trade.

Benjamas Kotenongbua, a senior economist at BoT's Northeastern Office in Khon Kaen, said that this year's rice prices have soared unexpectedly to a new record high.
The government-sponsored mortgage program for the 2007-2008 rice season saw only 240,000 tonnes of rice being committed to it, compared to earlier estimates of 8 million tonnes, she said.

The major reason for the sharp drop of rice participation in the program was the result of soaring of rice prices which persuaded farmers and middlemen not to sell rice to millers.

The practice has already affected exporters, according to Ms. Benjamas, as farmers are increasingly unwilling to let go of their stocks in hand.

In the first three months of this year, rice exports totaled 3.26 million tonnes, up 166.2 per cent from the 1.96 million tonnes shipped in the corresponding period in 2007. The target rice export for the whole year was originally set at 8.75 to 9 million tonnes.

Deputy Prime Minister and Commerce Minister Mingkwan Saengsuwan said last week that Thai jasmine rice, or Khao Hom Mali, is now priced on average at 34,600-36,000 Baht per ton (US$1,091 to 1,135), 5 percent white rice at 26,400 to 26,700 Baht per tonne (US$832-842), and paddy at 17,000-18,000 Baht per tonne (US$536-567).

On government's rice stock, Khun Benjamas said a total of 200,000 tonnes of rice had been missing from warehouses nationwide. Damages were estimated at approximately Bt3.2 billion (about US$101.1 million).