Rice will become 25 percent more expensive; exports are struggling
The retail price of rice will increase by at least 25 percent next month. A bag of 5 kilograms of white rice will cost 120 to 130 baht and Hom Mali (jasmine rice) 180 to 200 baht.
Somkiat Makcayathorn, president of the Thai Rice Packers Association, makes this prediction. The price increase is the result of the reintroduction of the collateral system for rice. In this system, farmers mortgage their white rice for 15.000 baht per ton and Hom Mali for 20.000 baht. Resellers are expected to hoard until the government pays out. Forecasts for rice exports range from $750 to $850 for regular rice and $1200 to $1300 for Hom Mali.
The rice exporters are not happy with these prices. 'It will be more difficult for exporters to compete with higher costs,' says Korbsook Iamsuri, chairman of the Thai Rice Exporters' Association. 'It's hard to be confident that Thailand can remain the world's top exporter. But the government says this policy is necessary to help bring greater [social and economic] balance to the country. We just have to do the best we can to minimize the impact.'
The collateral system replaces the price guarantee system of the previous government and will come into effect on October 7. It previously functioned under the Samak and Somchai governments. According to the authorities, it is a crucial element of more comprehensive plans to increase farmers' incomes and stimulate the agricultural sector. Critics say the system offers numerous opportunities for corruption and is a waste of public money.
The Bank for Agriculture and Agricultural Cooperatives has to borrow money from other financial institutions to fund the estimated 190 billion baht needed for the system. The bank currently has 50 billion baht available. Expect 8 to 10 million tons of rice to be pledged during next year's harvest. That would be almost twice as much as the previous record of 5 million tons of rice.
And there they go again. Once again, they succeed in setting up a fraud-sensitive system. Community money eventually evaporates and disappears into the pockets of corrupt people. Bad for exports, bad for Thailand's position on the rice market and all under the guise of helping the poorest. I think it's a bad thing.
Damn. Last year already. I already pay more than 30 euros for 20 kilos. Soon I'd better get it myself from the family then I'll be even cheaper, it seems.
I think I'm going to try to get my girlfriend to eat the potato…. as long as she doesn't start talking like a Hageneese with a hot potato in her mouth.
Yes, damn it, that's how you also donate to charities.
Or buy the rice yourself and not let someone else do it. According to the article, 5 kilos will cost 130 thb, so 20 kg 520 thb is less than 15 euros.
I find it strange in Thailand that the rice in the isaan is more expensive than in the southwest,
my girlfriend noticed that too. Ok know that you have different qualities, but comparable quality in Isaan yet more expensive.
Well then they can only bring their rice to the export market when the rest of the rice exporters have sold their stocks….. The rice farmers will in any case not (any longer) get that 300 baht minimum wage…..