The Thai government’s move to stabilise rice prices for the 2014 harvest season has prompted mixed reactions from local rice industry representatives.
According to Thai media reports, Thailand’s Rice Policy Committee on Friday approved an interest-free loan scheme, which will see that country’s Bank for Agriculture and Agricultural Cooperatives distribute loans to farmers in exchange for them delaying the sale of 2 million tonnes of rice crops.
Sok Puthyvuth, president of the Cambodia Rice Federation said yesterday the policy would impact Cambodia negatively when Thailand is forced to sell the held-over stock.
“Thailand’s old stocks of rice have not even been sold off yet,” he said, referring to the ex-Thai government’s state-buying program, which ended early this year and resulted in more than 12.8 million tonnes of Thai rice being stockpiled. “Sooner or later they will have to release the stock pile into global market, which will impact Cambodia.”
Under the Thai scheme, farmers will be loaned 14,400 baht ($443) per tonne of Hom Mali paddy and 11,700 baht ($360) per tonne of glutinous rice held over the upcoming harvest season, from November to February. Farmers will also be granted 1,000 baht ($77) for every tonne of rice, the Bangkok Post reported. The government will provide the loans for up to 90 per cent of Thai farmers’ total rice stock.
Thailand’s government is aiming to increase the price of unmilled white rice to around 8,500 baht (around $263) per tonne, unmilled jasmine rice to around 16,000 baht (around $495) per tonne, and glutinous rice to around 13,000 baht (around $401) per tonne by installing the loan scheme.
But Kunthy, chief executive officer of Battambang Rice Investment Co was more optimistic about the neighbouring nation’s rice industry policy.
“Their [Thailand’s] pricing impacts Cambodia because they are a well-known fragrant rice exporter, while Cambodia is a relative newcomer with lower prices [being] the only thing keeping the Kingdom competitive,” Kunthy said. “I am glad to see their government’s intervening on pricing. It is good for them, while in Cambodia, we have to struggle by ourselves,” Kunthy added.