Rice packers agreed yesterday to cap their prices for two months effective immediately, but asked the government to address hefty fees now charged by chain retailers.

Rice packers claimed they have been affected by a rise in management fees and slotting allowances by retailers, with some raising the fee to 10% per rice pack from 4-6% previously, said Somroek Tangpiroonthum, president of the Thai Rice Packers Association.

Packed rice prices rose over the past two weeks, particularly for Hom Mali rice, which has increased by 10% to 180-190 baht per five-kilogramme pack.

Rice packers attribute the rise to higher demand from both local consumers and exporters as well as limited supply as most of the grains have gone to the government's pledging scheme that offers higher-than-market prices.

Yanyong Phuangrach, the Internal Trade Department's chief, said the department would call a meeting with retail operators next week to discuss rice packers' complaints about fees.

However, he said retail packed rice prices were expected to ease soon, as the government is stepping up releasing its white rice and Hom Mali rice stockpile.

According to Mr Yanyong, the release of Hom Mali rice would come from three channels: 300,000 tonnes sold through the Agricultural Futures Exchange of Thailand (Afet), 70,000 tonnes through bids likely opened on Aug 10, and 600,000 tonnes from the government's paddy stocks also planned for release next month.

The government has already scheduled a bid for 300,000 tonnes of grade-B 100% Hom Mali rice from state stocks via the Afet on Aug 6.

The bid would be conducted on a "basis auction" method whereby Afet rice futures would be used as the reference.

The largest-ever auction came after the National Rice Policy Committee ruled on July 17 that officials could release a total of 763,920 tonnes of milled rice bought during the 2008-09 main-crop season for sale via Afet.

It was part of the government's plan to release some of its estimated 6 million tonnes of rice stock. Thailand is estimated to produce over 3 million tonnes annually of milled Hom Mali rice, 2 million tonnes of which are for local consumption.

Source: Bangkok Post