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Home » Economy » Rice may be 19 percent more expensive as a result of flooding
Rice may be 19 percent more expensive as a result of flooding
Posted in Economy, News from Thailand, Floods 2011
Tags: floods, Price increase, Rice, Vietnam
Rice prices may rise 19 percent by the end of the year due to the floods in Southeast Asia, inclusive Thailand, and as the government has started to buy up rice through its mortgage system, the expectation is CP Intertrade Co, Thailand's largest rice packer.
The price of Thai parboiled rice may go up to $750 a ton from $630 now and the same product from India from $480 to $500, Sumeth Laomoraphorn, president of Intertrade estimates.
Next year, India could overtake Vietnam as the second largest rice exporter in the world. It is estimated that India will ship 2 million tons in the next six months and 4,5 million tons next year. Vietnam exported 6,7 million tons last year. Thailand's export volume is down from 10,5 million tons this year to 8 million.
The floods have caused Thai rice production to shrink by 3,5 million tons, 10 percent of last year's harvest, the Thai Rice Exporters Association says. Sumeth thinks that the price will therefore remain high at least until March. Although India will try to increase its exports, the loading capacity of the ports is limited, he says.
Not only rice will become more expensive, in preparation for the planned increase in the minimum wage, the prices of many things are already being increased, vacancies are not being filled and people are even being fired, now with the flooding as an excuse.
The “temporary” closures of many factories due to the flooding could well take on a permanent character in the fairly short term, after all, most factories elsewhere in the world have sufficient production capacity.
I'm fairly optimistic that it will all work out, but still, deep in the heart, gnawing at the brain, the doubt.