CP Group has raised its profile in the rice industry by entering rice farming and wants to manage production efficiently via the upstream business.

Grown at a 200-rai plantation in Kamphaeng Phet province, its first crop was planted between July and August using na dam or seedling-transplanted cultivation and showed higher yields than nearby farms.

Sumeth Laomoraphorn, chief operating officer of CP Intertrade, said average paddy productivity of the Pathum Thani 80 fragrant rice strain and Phitsanulok 2 white rice variety was good, but Hom Dok Mali 105 had a poor result as it was attacked by brown planthoppers.

The second trial crop will be planted soon as the company assesses whether its pre-harvest processes and technologies are practical and cost-effective. The company also uses post-harvest technologies such as moisture reduction and drying to maintain a high volume of whole-kernel or head rice.

``We're developing a device to measure the aroma of fragrant rice and even a tool for testing the DNA of Hom Mali to maintain its premium quality,'' Mr Sumeth told participants at a recent rice seminar.

Machines have been used for both seedling transplants and crop harvesting.

He said investment in upstream activity would help the company become an integrated rice business, from farming and milling to exports.

CP Intertrade now owns three mills in Kamphaeng Phet, Buri Ram and Suphan Buri with a combined capacity of 1,000 tonnes of paddy a day. A new processing plant in Ayutthaya will begin operation soon to add another 1.08 million tonnes of milled rice, bringing the company's total capacity to 1.4 million tonnes.

The subsidiary of Charoen Pokphand Group, Thailand's biggest agribusiness conglomerate, has shown robust growth with sales rising from 300,000 tonnes in 2004 to about 900,000 in 2010.

``To have sustainable growth, a company must control production and the supply chain. Farming enables us to know real costs, use proper farm essentials, and learn how to work cooperatively with farmers,'' said Mr Sumeth.

He said many Thai farmers were familiar with paddy-sown cultivation or na whan, which shortens working time but offers low yields.

CP Intertrade expects to sell 900,000 tonnes of rice in 2011 _ 500,000 for export and 400,000 locally. The volume is similar to the year before but far lower than the previous target of 1.6 million tonnes, divided equally between export and domestic sales.

Mr Sumeth said a stagnant market and volatile prices caused by the government's new rice scheme were impediments to sales in 2010.

``As this was the first year for the income-insurance scheme for rice crops, it took traders some time to adjust their business,'' he said.

Initially traders were uncertain whether the scheme would be successful or the authorities would bring back the old pledging programme, he noted.

Thailand's rice exports in 2010 were estimated at 8.5 million tonnes, down from 8.7 million in 2009, affected partly by price competition from Vietnam.

But 2011 could be different as traders are confident that rising prices for oil and grains _ notably wheat _ could drive up rice prices too.

Those conditions could help the company achieve 10% growth, he added.

Source: Bangkok Post