Thai government has informed major damages from the rice-funding program started by the previous government. The country has continued to support farmers store rice, expecting the price will rise in the global market.
Thai 5% broken rice is trading at $405-415 per ton, a small fall of $10-15 per ton from starting November. The present price is $100 per ton lesser than that of 5 years ago.
The Thai government lately released $1.5 billion worth of bonds to increase money to pay dues linked with rice price funding programs. It had allegedly suffered a damage of 680 billion baht, which has been implemented since 2004.
In an struggle to increase the rice price, the government has called on Thai farmers to stock 2 million tons of rice, assuring to pay 1,000 baht per ton, or $77, to farmers to safeguard the good quality of rice in stock.
The representatives prospect that the dearth of Thai rice in the world market will surge the price in the world market by 8,500 baht per ton.
An official of the Vietnam Food Association (VFA) stated that the backing from the Thai government to its farmers would assist other rice exporters, including Vietnam, India and Pakistan, as well.
The official said there would be two situations to happen when Thailand stores rice. First, the move would not only benefit to drive up the Thai rice prices, however plus make other exporters’ rice more prized.
Second, once Thailand retains its rice in pillories, this would support other rice production countries like Vietnam, India and Pakistan to raise rice production as rice exports can trade at decent prices.
This scenario has been happening over the last few years. When Thailand did not sell its rice, Vietnam effectively increases its export price. If this strikes in 2015, Vietnam would remain gaining from the Thai policy.
Though, VFA still can see threats, meaning that the condition would be inferior if the Thai government pauses supporting farmers and introduces tored rice into the market.
The official also noticed that Vietnam’s rice value would also be determined by many other influences in 2015, comprising demand from China and the Philippines. The plans to import 600,000 tons of rice by Filipino government in 2015 will content domestic demand.
According to the Ministry of Agriculture and Rural Development (MARD), Vietnam exported over 6 million tons of rice in the first 11 months of the year, with return of $2.8 billion. The statistics symbolized a 3% cut in the export volume, but a 2% rise in worth if matched with the same phase in 2013.