The Thai Rice Exporters Association feels that the government's rice pledging scheme will have a severe impact on Thai rice exports and that Thailand will lose a significant share of the global market as the world's leading rice exporter.

At Le Meriden Hotel in Chiang Mai, the Thai Rice Exporters Association and the Vietnam Food Association held the 8th Thai-Vietnam Rice Trade Cooperation conference with issues like rice production, trade and the 2015 ASEAN Economic Community on the agenda.

Thai Rice Exporters Association Chairman Chukiat Ophasawaong commented on the current Thai rice export climate, stating that since the beginning of last year, Thailand has exported a record-high eight million tons of rice and projects that the number will reach 11 million by the end of this year.

He said that this is due to the rice scheme that was implemented by the previous government, which distorted the free market and allowed high competition.

However, he expressed concerns about the current rice pledging scheme in which the government will buy jasmine paddy rice for 20,000 baht per ton and pay 15,000 for white paddy rice, which will drive Thai rice prices up by 300 US dollars per ton.

The current global rice price is at 530 US dollars per ton.

The rice pledging policy will have a direct impact on global market mechanisms since Thai rice exporters will be unable to compete with rivals offering better prices.

According to information from the US Agriculture Department, Thailand's rice exports are expected to decline by 20 percent, or two million tons, as a result of the rice pledging scheme.

The Thai Rice Export Association chairman added that the government's rice pledging scheme may benefit rice farmers as they will earn higher incomes.

The rice price guarantee, however, distorts actual market mechanisms, which will subsequently affect the public as rice prices will soar.

Other rice-exporting nations will benefit from the Thai rice pledging scheme.

Source: TANN