Thai millers proposed yesterday the junta raise rice stocks held by exporters and millers to stop plummeting paddy prices, but exporters said the move would increase their financial costs and reduce competitiveness.

Measures to help rice farmers deal with low paddy prices and spiralling production costs remain far from settled, as rice-related parties are still divided.

The Commerce Ministry called a joint meeting yesterday with representatives from the Thai Rice Mills Association, Thai Rice Exporters Association, the Public Warehouse Organisation, the Internal Trade Department and the Agricultural Futures Exchange of Thailand (AFET), a day after Gen Chatchai Sarikalya, deputy head of economic affairs for the National Council for Peace and Order (NCPO) rejected proposals and ordered the ministry to look for fresh methods.

Banjong Tangjitwattanakul, vice-president of the mills association, said it proposed in addition to the subsidy for production costs given to farmers, the junta should revise legal requirements for exporters and millers requiring higher stocks.

Each exporter is required to set aside 500 tonnes of rice they ship each year as stock, but there is no such requirements for millers.

Mr Banjong said the association believes it is imperative for exporters to maintain 10-15% of the rice they export as stocks, while millers should set aside 10-30% of annual milling capacity per year as stocks.

This would absorb the rice supply in the market and boost the local paddy prices, he said.

However, Chookiat Ophaswongse, honorary president of Thai Rice Exporters Association, disagrees, saying the proposal will raise exporters' costs and hurt their competitiveness. He added the proposal does not make sense, as the Thai government built a hefty rice stock and paddy prices remained low.

"The authorities should stop disposing of their entire rice stock via any means and carry out inspections," he said.

"Once we know the exact amount of pledged rice, the amount exported, the amount withdrawn from state warehouses, the amount of quality and rotten rice, the amount that has disappeared and the total expense incurred, it will dispel market speculation and raise rice prices."

Source: Bangkok Post