Packed rice prices to drop once stocks sold
Written by Writer on Monday, November 10th, 2008
AGRICULTURE / Packed rice prices to drop once stocks sold
WALAILAK KEERATIPIPATPONG
Retail prices of packed rice are expected to fall sharply next year when current rice stocks sell out, traders said.
Although market prices have fallen far from a peak six months ago, packers said they still had expensive stockpiles purchased many months before.
”People might not understand that the rice we packed today is grain that we bought three months before,” said Rut Subniran, chairman of the executive board of Pathum Rice Mill and Granary Plc (PRG), a rice packer and distributor of the Mah Boonkrong brand.
At that time, rice prices were still high, though they were down from a peak in May. At the time, prices of 100% white rice in the domestic market shot up more than 3,000 baht per 100kg sack, from an average of 1,350 baht in January.
Hom Mali fragrant rice broke a record at more than 3,200 baht per sack, nearly a 40% increase from earlier in the year, driving prices of packed rice to rise sharply to 240-250 baht per five-kilogramme bag.
”It’s a much different picture today. Exports have been slow with more low-priced rice from Vietnam,” he said.
That oversupply resulted in a strong decline of export rice prices, to US$800-830 a tonne of Hom Mali rice last week, compared with more than $1,200 a tonne shipped in May. The export price of white rice fell to $595 last week, down about 40% from May.
Sumeth Laomoraphorn, president of CP Intertrade, a packer of the Royal Umbrella brand, said cheap Vietnamese rice was the culprit behind falling prices.
Hom Mali rice produced by Mah Boonkrong, Golden Phoenix and Royal Umbrella sells at 190-220 baht per 5kg bag, but some small-scale packers receive only 160-170 baht.
Packers have been pressured by consumers and authorities to bring down prices to match market levels.
Yanyong Phuangrach, director-general of the Internal Trade Department, said retail prices had gradually been reduced in the past months and he would keep monitoring packers.
According to Mr Rut, some packers have slashed retail prices of Hom Mali rice sharply but he doubted the product is genuine Hom Mali. He suggested the Internal Trade Department examine the product to check if the rice had been mixed with lower quality rice.
Bangkok Post
Monday November 10, 2008
