The Public Warehouse Organisation (PWO) estimates a total of 18 million tonnes of paddy will be pledged under the government's mortgage programme, 28% short of the projected 25 million tonnes earlier, as floods have damaged a huge amount of paddy.

The PWO currently has 25 warehouses with a combined capacity to store 2.5 million 100-kilogramme bags, said vice-president Somsak Wongwattanasant.

Its capacity is much lower than the required 210 warehouses. Earlier projections would have required storage at 300 warehouses if 25 million tonnes of unmilled rice entered the scheme.

The PWO, through provincial officers, is in the process of checking the quality of the warehouses that are joining the government's project.

It predicted that not much paddy would be harvested in November and December, reducing the burden on rice storage during the period and providing the agency with more time to recruit more warehouse operators if needed.

The PWO ordered the first round of milling of pledged rice on Oct 20 for 89,000 tonnes, of which 80,000 tonnes were 5% white rice.

Since the formal introduction of the mortgage scheme on Oct 7, around 250,000 tonnes of unmilled rice have been pledged with millers participating in the programme. The government pays 15,000 baht a tonne for unmilled white rice and 20,000 baht for fragrant rice.

Charnchai Rakthananon, president of the Thai Rice Millers Association, said the local market price of unmilled white rice with 25% moisture content was quite stable at 12,750 baht a tonne while the price for unmilled fragrant rice with 28-30% moisture content was between 14,500 and 15,000 baht.

The association's preliminary assessment indicates that milled rice at millers' warehouses in many provinces has been damaged by floods. It predicted it would take several months to harvest new crops.

The PWO expects to supply the market with up to 400,000 five-kilogramme packs of rice by Nov 10.

It is confident of completing by March next year the production of 20 million packs or 100,000 tonnes as authorised by the government.

The organisation has not yet to set the price for its packed rice and has not yet determined whether to use the existing rice in its stockpile or new rice that has just entered the mortgage programme this year.

Source: Bangkok Post