Thailand. Rice farmers throw in towel after prices hit 10-year low

28.10.2016

Farmers in Chai Nat province have started putting up "for sale" signs on their farmland amid plummeting rice prices.

The decisions came after they could no longer shoulder losses and needed cash to repay bank loans.

LOSING MONEY ON THE RICE THEY GROW

Earlier, farmers in tambon Wat Khok, Manorom district, in the Central province of Chainat asked the government to help them cope with slumping paddy prices, which averaged 6,200-6,300 baht a tonne.

At this level, they suffered losses and urged prices above 8,000 baht, their break even point.

"I need the money to repay debts as selling rice doesn't cover costs."

"I suffered losses for every crop due to high prices of fertilisers, insecticides and seeds," said Pirom, whose family name was not revealed.

FARMERS MUST SELL LAND TO REPAY DEBTS

Millers now pay farmers only 6,000 baht a tonne for paddy, he added.

"I have no choice but to sell land since it will be seized anyway if i can't repay the debts," he said, meaning that his land had been used as collateral for loans and will taken if those loans cannot be paid back.

RICE PRICES SUDDENLY FELL

Prices of jasmine paddy (Hom Mali) from the 2016/17 crop fell by as much as 1,000 baht a tonne in a week to 6,800-9,000, depending on humidity (moisture), on Oct 26, according to a Commerce Ministry survey.

White rice paddy also dropped by the same margin to 7,400-7,700 baht a tonne.

And the prospects continue to look bleak for farmers.

Jasmine rice futures contracts for contracts to be delivered in December were at 15,800 baht a tonne, which translates into 8,000 baht for paddy. (A tonne of paddy yields roughly 500-660 kilogrammes of milled rice.)

LOWEST PRICE IN 10 YEARS TRIGGERED BY INCREASED OUTPUT

The export price of Jasmine rice at $490 a tonne, based on the futures price, is the lowest in 10 years, triggered by increasing output in almost all exporting countries.

The ministry, however, was optimistic, saying at these levels, the prices would hit the bottom and should begin to pick up next year.

MEASURES TO ADDRESS FARMERS' PROBLEMS

Authorities have launched some measures to address farmers' problems.

Millers were asked to buy 400,000 tonnes of jasmine paddy in November and December at close to market prices. However, exporters have yet to give details on their planned purchases from millers.

The millers also urged to speed up the barn pledging measure for 2 million tonnes to prop up prices at 11,700 baht so farmers can start pledging their output with the Bank for Agriculture and Agricultural Cooperatives


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