Mingkwan says it's to ensure 'moderate prices'
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Despite sky-rocketing rice prices, Siriwan shop on Soi 85 off Charoen Krung road is keeping the price of the steamed rice it sells at two baht a bowl although the portion is a little smaller.
The government says that its decision to release rice from the state's stockpiles for sale to the public will ensure that consumers pay moderate prices for rice for the rest of the year.
The measure, which was approved by the cabinet yesterday, promptly brought down the standard-grade rice price by 4,000 baht per tonne in yesterday's trading on the futures market.
The cabinet gave the green light to bring 2.1 million tonnes of rice in the government's stockpiles nationwide to be sold as packed rice in order to meet demand, at prices 20% lower than current market prices.
Commerce Minister Mingkwan Sangsuwan said the measure would help balance supply as well as the price of packed rice in the market.
'The low-cost packed rice programme will help Thai people to consume rice at moderate prices for the entire year because the programme will be carried out throughout this year while the new crop of rice will come out later in the year,' he said.
The current state stockpile, which will be distributed under the low-cost packed rice programme, comprises both 5% white rice, the most popular kind of rice consumed in the country and Hom Mali (Jasmine) rice, said Mr Mingkwan.
The government's packed rice will be available under the brand Thong Fah Maha Chon, or Public Blue Flag programme. The price is around 170 baht for a 5kg pack of standard-grade 5% white rice compared with the average of 200 baht currently available in the market.
Distribution of the low-cost packed rice will begin within two weeks through mechanisms of the commerce and interior ministries, and local administrations.
The cooperation of provincial governors and MPs in each areas would be sought to help distribute the rice.
The low-cost packed rice would not be available in either modern trade super stores or ordinary retail shops in order to keep sales prices reasonable.
The minister dispelled concerns over the country's food security following the depletion of the government's rice stocks. He said earnings from rice sales would be earmarked for buying off-season rice which would come out next month to replace inventories.
Mr Mingkwan said his ministry also projected that Thailand's rice exports this year were likely to be higher than nine million tonnes because the contribution from harvesting the second crop, the amount of which is expected to reach four million tonnes this year, will be increased by soaring rice prices on the world market.
Supplies of the new rice crop, starting from August up until November, would reach 20 million tonnes, 11 million of which would be for local consumption and the remaining nine million would for export, he said.
Somroek Tangpiroonthum, president of the Thai Rice Packers Association, said the cabinet made the right decision at the right time. Rice supplies in the market were plunging due to speculation by suppliers and consumer hoarding over fears of an unstoppable surge in rice prices.
The measure yesterday contributed significantly to the 5% in the rice futures price traded yesterday on the Agricultural Futures Exchange of Thailand for rice to be delivered in June. The price fell from 32 baht to 28 baht per kilogramme, or by around 4,000 baht per tonne, he said.
Mr Somroek, however, cautioned that the measure might affect prices of paddy, particularly for the second crop which is under harvest.
As a result, the government should carefully implement the measure to ensure proper supply in the market in each period that it releases rice from the stockpile, he added.