Rice may be difficult to find on store shelves soon as millers hold back stocks from packers, expecting windfall profits with new rice policy.
AGRICULTURE: Millers hoarding rice in hopes of pledging return by Phusadee Arunmas
Rice packers are warning of retail price increases in the next two months as stocks dwindle while the industry waits to see if the new government will make good on its promise to increase crop prices.
Rice millers are waiting for policies from the new government, which is lowering rice volume in the market and affecting packers substantially," said Somkiat Makcayathorn, president of the Thai Rice Packers Association.
One of Pheu Thai's key campaign promises was to bring back rice pledging with a commitment to pay 15,000 baht a tonne for white rice paddy, and 20,000 baht for Hom Mali fragrant paddy
Those prices are far above current market rates, and millers have been stocking up on paddy in the hopes of earning windfall profits later this year.
"It's hard to get rice from millers to repack for sales," Mr Somkiat said.
Domestic prices are already edging up in response to the expected return of pledging. Fragrant rice is selling for 30-32 baht a kilogramme, up from 28-30 baht the week before the election. The industry estimates rice prices could increase by as much as 60% by the end of the year if Pheu Thai keeps its promises.
Pheu Thai's promise to increase the minimum wage to 300 baht a day will also affect the rice-packing industry.
Wages account for 8% of the cost of rice, and analysts say a wage increase would raise that proportion to 11%.
"We may have to raise retail prices in August and make revisions early next year if a new wage is applied," said Mr Somkiat.
The association will ask the new Commerce Minister to protect packers by capping retail rice prices to conform with changing costs. The capped prices are currently 90-125 baht for a five-kilogramme bag of white rice and 150-190 baht for five kilogrammes of Hom Mali.
The pledging plan would replace the income guarantee programme that allows farmers to mortgage paddy to the state and redeem the grain when the market price is higher.
But there have been no records of redemption because past pledging prices were normally high, creating a stockpile of 6 million tonnes of paddy in 2009 from the previous programme.
The paddy is largely kept at millers' warehouses, costing the government more money. High pledging prices also induce traders and millers to buy low-priced grain smuggled in from neighbouring countries to earn windfall profits.
(Source: Bangkok Post, AGRICULTURE, Millers hoarding rice in hopes of pledging return, 11/07/2011, Phusadee Arunmas, link)
Rice Industry Vocabulary
hoarding - buying a lot and keeping it without using it (because you expect the price to go up in the future) กักตุน
repack - pack again
repack rice for sales - take rice from the big bags used to store it in warehouses and put it in smaller bags used to sell it in stores
rice packers - companies that package rice creating a product that can be sold in stores
packers - same as "rice packers"
retail - to sell directly to the public for their own use ขายปลีก
retail price - the price that customers pay in stores
stockpile - large quantities of goods stored for future use คลังสินค้า จำนวนสินค้าที่เก็บตุนไว้เป็นจำนวนมาก
stocks - large amounts stored for future use
dwindle - reduce in number ลดจำนวนลง
stocks dwindle - the amounts of rice in stock (for future use) are decreasing
stocking up on - storing large amounts for future use
warehouse - a large building to keep stocks of rice until it is time to sell them
volume - the quantity or amount of something
paddy - rice after it has been harvested from the field ข้าวเปลือก
current - now, at the present time ปัจจุบัน
current market prices - prices that rice is being bought and sold at now in the market
windfall profits - sudden large profits
domestic prices - prices inside the country (not "export prices" for sale outside the country)
prices edging up - prices increasing slowly (by little amounts each time)
cap - create an upper limit (no more than this value)
capping retail prices - setting a highest price that can be charged in stores (cannot rise above a certain level)
X conforms with Y - X is at the appropriate level for Y
capping retail rice prices to conform with changing costs - setting highest price of good charged in stores so that it is greater than cost of producing it
replace - to get rid of someone or something and to put a new person or thing in their place หาคนมาแทน เลิกให้และนำสิ่งใหม่มาใช้แทน
pledging plan - the old system (of government rice price support for farmers)
rice pledging - same as "pledging plan"
income - money that people receive from work or some other source, used for household consumption and savings
guarantee - a promise that something will be done or will happen คำรับรอง, การประกัน (See glossary)
income guarantee - a promise of a certain income
income guarantee programme - the new rice policy started by the Abhisit administration
mortgage - a legal agreement in which you borrow money from a bank
state - government รัฐ
redeem (verb) - when you are given back the valuable thing that you gave (pledged) as guarantee for a loan (meaning: if you did not pay back the loan, they lender would take that valuable thing, which is called "security" for a loan or "collateral")
redemption (noun) - the action of redeeming the thing you gave as security for a loan
grain - a crop like rice or wheat, the seed from cereal crops such as rice, wheat, or corn เมล็ดพืช
records - pieces of information describing something written down or stored on a computer บันทึุก
trade - the business of buying and selling things
traders - companies that buy and sell things for profit
rice traders - companies that buy and sell rice for a profit
smuggled - bring goods into a country secretly and illegally
smuggle rice across borders - bring rice into the country illegally from another country
key - important คนสำคัญ
campaign - a planned series of activities designed to persuade voters to vote for a particular candidate or political party การรณรงค์หาสียง
campaign promises - same as "election promises"
election - the process of choosing a person or a group of person for a position, especially by voting elect (v) electoral (adj) synonym: the polls การเลือกตั้ง
election promises - promises that election candidates make to help get them elected (promises are often not kept)
commitment - a promise to do something in the future ข้อสัญญา
expected - believe will happen คาดว่า (จะเกิดขึ้น)
estimates - guesses of what the size, value, amount, cost, etc. of something might be การประมาณค่า
wage - an amount of money that you earn for working, usually according to how many hours or days you work each week or month ค่าจ้าง
minimum wage - the lowest wage that can legally given to an employee per day
proportion of X - part of X, percentage of X
revisions - changes การเปลี่ยนแปลง
induce - cause ก่อให้เกิด