Thai rice price drops to lowest level since 2011

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Thai rice exportThe day Thailand’s reshuffled cabinet approved the reversal of the rice price cut for farmers and reset it to 15,000 baht ($483) per tonne, the export price for the same sort of 5 per cent-grade white rice fell from $520 to $480 per tonne on the markets, industry figures showed on July 2.

It is the lowest price level since 2011, indicating a market being astonished about the Thai government’s move. It also means that Thai rice exporters don’t have and leeway for gains at the moment.

The government originally has cut the price at which it buys paddy from farmers by 20 per cent to 12,000 baht ($387) per tonne from 15,000 baht in a bid to reduce losses incurred by the programme, but later changed its mind.

The government is now sitting on 17 million tonnes of rice overstock of which it aims to sell up to 5 tonnes within three months. Bangkok traders say this will not be possible without significant losses as it would accelerate the downward price trend on the world market where  Thai rice is already uncompetitive to Vietnam and India, countries that quote a tonne at $365 and $445, respectively.

The recent rice price flip-flop has both angered farmers and traders and put the government’s credibility at stake, observers claim, expecting the volatile political situation in the country to further deteriorate.

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Reading Time: 1 minute

The day Thailand’s reshuffled cabinet approved the reversal of the rice price cut for farmers and reset it to 15,000 baht ($483) per tonne, the export price for the same sort of 5 per cent-grade white rice fell from $520 to $480 per tonne on the markets, industry figures showed on July 2.

Reading Time: 1 minute

Thai rice exportThe day Thailand’s reshuffled cabinet approved the reversal of the rice price cut for farmers and reset it to 15,000 baht ($483) per tonne, the export price for the same sort of 5 per cent-grade white rice fell from $520 to $480 per tonne on the markets, industry figures showed on July 2.

It is the lowest price level since 2011, indicating a market being astonished about the Thai government’s move. It also means that Thai rice exporters don’t have and leeway for gains at the moment.

The government originally has cut the price at which it buys paddy from farmers by 20 per cent to 12,000 baht ($387) per tonne from 15,000 baht in a bid to reduce losses incurred by the programme, but later changed its mind.

The government is now sitting on 17 million tonnes of rice overstock of which it aims to sell up to 5 tonnes within three months. Bangkok traders say this will not be possible without significant losses as it would accelerate the downward price trend on the world market where  Thai rice is already uncompetitive to Vietnam and India, countries that quote a tonne at $365 and $445, respectively.

The recent rice price flip-flop has both angered farmers and traders and put the government’s credibility at stake, observers claim, expecting the volatile political situation in the country to further deteriorate.

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