THE agriculture sector of the national economy is now expected to grow by only 1.45 per cent, compared with an earlier projection of 2.5-3 per cent, after declines in crop production as a result of drought, according to the Ministry of Agriculture and Cooperatives' Office of Agricultural Economics.

Lersak Rewtarkulpaiboon, secretary-general of the OAE, said the Irrigation Department had asked farmers to postpone in-season rice cultivation in the Chao Phraya River area to late July.

The OAE expects the price of 5 per cent broken white rice to rise to Bt8,500 a tonne this year. The in-season rice harvest is expected to total 25 tonnes of paddy, lower than the normal level of 27 tonnes.

The global rice stock is forecast to decrease as major rice producers such as Vietnam have slowed their rice exports, also because of drought.

Kosit Panpiemras, executive chairman of Bangkok Bank, said yesterday that Thai gross domestic product was expected to grow by 3 per cent or slightly less this year. He said exports were expected to decline because of the slowdown of the world economy. He said the government's infrastructure projects would be good for the Thai economy over the longer term but would not have much effect on GDP growth in the short term.

Meanwhile, the government's next rice auction seems to be attracting tepid interest, since traders' confidence in grain quality and market prices are both sinking.

The Foreign Trade Department yesterday invited traders to qualify for the third round of bidding this year for 1.06 million tonnes. However, only 43 rice traders responded, less than half of the second round, which managed to draw 100 traders.

The tender will be held today at the Commerce Ministry's head office in Nonthaburi.

An industry source said some rice traders that joined the past two rounds had been disappointed by low-quality stocks. "Rice traders have low confidence in the rice quality in the government's granaries because some could not get good-quality rice as guaranteed. Traders are filing complaints to the Public Warehouse Organisation and rice surveyors to solve the problem of deteriorated rice quality," the source said.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said poor quality was just one reason fewer rice traders will join the auction. The main reason is the downtrend in the rice price in the market, which has dropped gradually to about Bt11 a kilogram, close to the government's floor, which was averaging Bt9.40-Bt9.50 a kilo.

Rice traders are suspending their purchasing plans, as they see lower rice prices in the near future.

The price of rice has been falling after decreasing orders from foreign buyers, while competition is high in the world market.

The price of Vietnamese rice has slipped to only US$340-$350 a tonne, while Thai white rice is quoted at $380-$390 a tonne, he added.

Sompong Kitireanglarp, president of Ponglarb, a rice exporter, said rice traders had shown less enthusiasm for the rice release partly because of low quality of the government's inventory.

According to www.thericetrader.com, Thailand's rice exports from January 1 to June 2 have declined by 2.2 per cent year on year to 3.77 million tonnes, while India's exports rose 23.7 per cent to 3.61 million tonnes.

Vietnam also shipped 5 per cent less rice in the period - only 2.16 million tonnes.

Source: The Nation