Thailand is expected to spend 88 billion baht to support rice prices


The Thai government is considering continuing mechanisms to ensure rice prices in the 2021-2022 crop year, including a commitment to spend 88 billion baht this year.

The Thai government is considering a mechanism to guarantee rice prices in the 2021-2022 crop year, including a commitment to invest 88 billion baht this year.

The Vietnam Trade Office in Thailand has just said that the Thai Government is considering continuing the mechanisms to ensure rice prices in the 2021-2022 crop year, including a commitment to spend 88 billion baht for this year.

Deputy Prime Minister and Trade Minister Jurin Laksanawisit said: “The Rice Sector Policy Council has agreed to continue the mechanism to ensure rice prices in the 2021-2022 crop year with criteria and measures to maintain stability. rice prices as in the previous crop year”.

Of the total budget allocation, 80 billion Baht is allocated for the rice price guarantee mechanism, the remaining 8 billion Baht will be for the price stabilization mechanism. This decision will be submitted to the National Rice Policy Council chaired by the Prime Minister, and then sent to the National Assembly for approval.

Under this income guarantee scheme, farmers receive the difference between the fixed rice price and the reference price that changes every two weeks along with the market price. This mechanism applies to 5 main types of rice: 15% moisture white rice, Hom Mali rice, 15% Pathum Thani fragrant rice, 15% moisture sticky rice, and local specialty fragrant rice. Under this mechanism, farmers receive 10,000 Baht/ton of white rice with 15% moisture content, limited to 30 tons/household or 40 rai (6.4 ha).

Thai Minister of Commerce Jurin Laksanawisit said that, in the 2021-2022 crop year from October 2021 to February 2022, Thailand is estimated to produce 26 million tons of rice, an increase of 4% compared to the current crop thanks to adequate rainfall and increased rice planting area due to Covid- 19 caused many workers to return to farming.

In a related move, Thailand is speeding up discussions with China to complete the remaining 200,000 tons in the 1 million tons contract in the form of G2G signed between the two sides in 2015. In June 2021, China China has agreed to buy 20,000 tons of white rice from Thailand under this agreement.

The Thai government aims to export 6 million tons of rice in 2021. BILLIONOf the total 6 million tons of rice expected to be exported this year, white rice will account for 2 million tons, followed by Thai Hom Mali rice with 1.5 million tons, parboiled rice with 1.5 million tons, while fragrant rice Pathum Thani, provincial fragrant rice and glutinous rice will make up the rest.

Last year, Thailand exported a total of 5.72 million tons of rice, down from 7.58 million tons in 2019. Rice export value in 2020 reached 3.72 billion USD, down from 4. $.27 billion of the previous year.

South Africa is the largest export market for Thai rice, with 672,777 tons, followed by the US with 672,183 tons, Benin with 476,290 tons, China with 381,363 tons, Angola with 347,292 tons and other countries accounting for 3.17 million ton.

Last year’s drop in rice exports was largely due to the strong baht, making Thai rice more expensive than competitors’ varieties. China has also become a rice exporter to export its huge rice reserves.

Last year, India ranked first in global rice exports, with 14 million tonnes. Followed by Vietnam with 6.3 million tons, Thailand with 5.72 million tons, Pakistan with 4 million tons and the US with 3.05 million tons.

The Thai Rice Exporters Association (TREA) calculates, the set export target 6 million tons for this year is appropriate due to many risk factors, especially the shortage of containers, and the strong strengthening of the baht. These are the reasons for high rice prices, making it difficult to compete with other exporting countries.