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World prices versus propping up the crop
CHATRUDEE THEPARAT
The government yesterday failed to determine the pledging prices for its paddy buying programme for the main 2008-09 crop as the ministers involved remain at odds.
Deputy Prime Minister Olarn Chaipravat suggested at the meeting of the Rice Policy Committee yesterday that the pledging prices should reflect current world prices, but Commerce Minister Chaiya Sasomsab insisted the buying price should not be below the high prices the government paid earlier for the second crop.
The government aims to buy eight million tonnes of paddy from the main 2008-09 crop to be harvested from November in an attempt to prop up prices. The buying is scheduled to run from today to Feb 28.
Under proposals made earlier, farmers were to be paid 14,000 baht per tonne of paddy with 15% moisture from the main crop, with Thai Hom Mali jasmine paddy at 16,000 baht and glutinous paddy at about 9,000 baht.
But current prices are 10,000 to 10,500 baht for paddy, with Thai Hom Mali jasmine paddy at 12,000 baht and glutinous rice at 5,000 to 6,000 baht.
The benchmark export price of white rice was also reduced yesterday by 3% from the previous week at the weekly meeting of the Thai Rice Exporters Association in Bangkok.
The price of 100% grade B white rice was set at $686 a tonne, the lowest level since March 26, compared to $707 last week. The price averaged $336 a tonne in October last year, said association spokesman Sompetch Anuchon.
Current prices are still well below the record of $1,080 reached in April.
The price of 25% white rice was set at $543 a tonne, against $557 a week earlier and $313 last year, he said.
Mr Chaiya said the pledging price for the main crop should not be below 14,000 baht a tonne, as the prices of the government's existing stockpile would be affected.
According to Banyin Tangpaporn, a deputy commerce minister, the disparity yesterday led to an agreement to set up a sub-committee chaired by Somporn Isvilanonda, an associate professor of economics at Kasetsart University, to study appropriate pledging prices.
The study will take into account farmers' production costs, the range of the pledging period, export prices and oil prices. It should be finalised over the next few weeks before being submitted to Dr Olarn and the cabinet.
According to Suparat Nakboonnum, a deputy government spokeswoman, the committee also agreed to set up a sub-committee chaired by Dr Olarn to handle sales of rice from the government's existing stockpile.
Ms Suparat said that Dr Olarn had pledged to sell 2.1 million tonnes of milled rice in the old stockpile within this year.
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