Price War Seen as Thai Rice Glut Swamps Market: South East Asia

Asian rice prices are forecast to keep slumping from a near 6 year low as Thailand clears out record stock piles threatening a price war with Vietnam & India.

The Government plans to sell 1 million metric tons a month compared with average monthly exports of 550,000 tons last year.

Thailand’s accumulated reserves under the state buying programme which ended this year under political unrest reached record levels. Its stockpile rose to 12.8m tons in 2013 equivalent to 1/3 of the global export market.

Thailand is short of funds to pay farmers under the now ended programme which is the target of an anti-corruption probe. The countries reserves doubled from 5.6m tons in 2011 when the intervention began under the Pheu Thai Party. The programme which paid farmers above market rates for their crops was designed to lift rural incomes.

While stock piles increase, dry weather in Thailand may curb harvests this year just as farmers adjust to the absence of guaranteed prices. The so called miner crop which runs to October may contract the stock pile 5% to 10.2m tons the Office of Agricultural Economics recently forecasted.

Comments are closed.