Rice distributors are preparing to raise the retail price by five to ten baht per five-kilogram bag next week. The Internal Trade Department is receptive to the move, saying the increase is based on market mechanism.

Thai Rice Packers Association Chairman Somrerk Tangpiruntham said the government's delay in the auction of its rice stockpile has resulted in a shortage and higher price of unmilled rice so rice distributors are forced to increase the price of the medium-quality five-kilogram package next week, most likely by five baht per bag.

The chairman said the price will come down once the government sells its seven million tons of rice stockpile.

Two weeks ago, rice distributors increased the wholesale and retail prices of Hommali rice in five-kilogram bag by ten baht, putting the new wholesale price at 180 baht and the retail price at 200 baht a bag.

Internal Trade Department Director General Yanyong Puangrach gave his approval for the price increase, saying the government does not want to interfere in agricultural produce prices. He said if costs goes up for manufacturers, then the selling prices should correspond.

The director general said a price increase of Hommali rice is to be expected over its scarcity since it is now an off season and the bulk of the country's rice stockpile is in the government's hand. He is confident the government will sell off its rice stock soon and this should help bring down the price.

Source: TANN