The rice industry has expressed some concerns about possible fraud and inefficiency of the price-pledging scheme soon to be implemented by the new government.

It has also signaled that the program will raise the retail price.

As announced by the Pheu Thai Party, the rice price-pledging program will be reinstated, replacing the price guarantee scheme put in place by the government led by Prime Minister Abhisit Vejjajiva.

Honorary President of the Rice Exporters Association Chukiet Opaswong claims that most of the rice mills have momentarily suspended operations, until the new government takes charge.

Chukiet noted that the rice industry is waiting for the details of the price-pledging program, promised to be reinstated by the incoming Pheu Thai-led administration.

As a result, exporters have stopped taking orders from overseas, fearing that they may be at risk of losing massive amounts of money as the price difference could be as high as 300 U.S. dollars per ton.

If the price-pledging scheme begins immediately after the new administration comes to power, the rice mills may stop selling to the exporters, because they would make a larger profit by joining the state-run program.

Currently, the rice price is between 9,000 to 9,500 baht per ton.

However, the Pheu Thai Party has promised to set the price at up to 15,000 baht.

Chukiet believes foreign importers are unprepared for the sharp rise in the rice price, which, in turn, will affect the export volume.

He has urged the new government to start implementing the price-pledging program at a later time, when the global price is higher and the overseas market has had time to adjust.

Meanwhile, President of the Thai Rice Mills Association Banjong Tangjitwattanakul has indicated that the quoted price of 15,000 baht per ton of unmilled rice will boost the prices of all types of rice across the board.

He expects that soon, the retail price will increase by 10 percent, from between 14 to 15.50 baht to between 18 to 19 baht per kilogram.

Furthermore, Banjong anticipates that the price will be increased by 40 percent in August, when the rice crops are being harvested in many provinces in the central region.

At the same time, President of the Thai Farmers Association Prasit Boonchuey does not believes the price pledging program is feasible, because it will require most rice mills to store between 10 to 20 million tons of rice, and they simply do not have the capacity for this.

Prasit added that farmers in only some areas will benefit from the price-pledging program.

Secretary-General of the Office of Agricultural Economics Apichart Jongsakul believes the new government should not bring back the price-pledging program at this time, because the global price is still on the rise.

Aprichart recommended that it should be implemented only when the rice price is falling.

At the same time, there are still many farmers who have yet to be reimbursed under the current price guarantee scheme.

He has also admitted to some concern over possible corruption, including having crops from neighboring countries registered in the program or contamination of the exported Thai rice, which could damage the rice industry in the long run.

Source: TANN