Thai government rules out selling rice stockpile

Thailand, the world’s biggest rice exporter, ruled out selling some of the 2 million tonnes of the grain it has stockpiled as global prices rise to records.

Supplies increase in the coming months as about 6 million tonnes of milled rice enters the market from the nation’s April through June harvest, Thai Commerce Minister Mingkwan Sangsuwan said.

“There is enough rice supply for domestic consumption,” Mingkwan told reporters late on Saturday in Nonthaburi Province, near Bangkok. “The current shortage has been caused by some hoarding and panic buying on concern the price will rise further.”

There is no need to reduce exports, he said.

The price of rice, the staple food for about 3 billion people, has nearly doubled in the past year on increased imports by the Philippines, the biggest buyer, and as China, India and Vietnam cut exports. Record food and fuel prices have stoked inflation, contributing to strikes in Argentina, riots in Ivory Coast and a crackdown on illicit exports in Pakistan.

“With its decision to maintain the rice stockpile, the Thai government wants farmers to fully benefit from the high prices as a new harvest comes to the market,” Sumeth Laomoraphorn, president of C.P. Intertrade Ltd, Thailand’s sixth-largest rice exporter, said by telephone yesterday.

Mingkwan, who met with traders and government officials on Saturday, had earlier proposed selling 200,000 tonnes of stockpiled milled rice to increase local supplies.

The ministry has added to the number of officials who inspect rice millers, warehouses and retailers to prevent hoarding of the commodity, Mingkwan said. The government has no plans to reduce rice exports because supplies are adequate to cover overseas orders, he said.

The retail price of average-grade rice, the country’s most consumed grain, rose to a record 26 baht (US$0.82) a kilogram, an 11 percent increase from a week earlier, statistics on the commerce ministry’s Web site showed. That prompted some industry figures to disagree with the government’s decision not to provide more of the grain.

“The release of state stockpiles should be made urgently to ease rice shortages in the domestic market,” said Pramote Vanichanont, honorary president of the Thai Rice Mills Association, a trade group of rice millers, after the meeting with Mingkwan. “Most Thais, especially the poor, are suffering from the surge in prices of rice, which is their basic necessity.”

The government should cap rice exports at 900,000 tonnes a month to prevent potential domestic shortages, Chookiat Ophaswongse, president of Thailand’s Rice Exporters Association, said after the meeting.

The Southeast Asian nation may be able to deliver as much as 1.2 million tonnes of rice a month, Prasert Gosalvitra, head of the rice division of the farm ministry, said in an interview on Thursday.

The country’s rice shipments may drop in the next few months because exporters are reluctant to take large advance orders on concern they could miss out on further gains in prices, Laomoraphorn said.

“They are taking orders for only the quantity of rice they can buy into their warehouses,” he said.