Somkiat Makcayathorn, honorary president of the Thai Rice Packers Association and managing director of Patum Rice Mill and Granary, said rice packers were facing higher costs due to higher prices of paddy rice in the dry season.

The price of packed rice has increased by about Bt5-7.50 per 5-kilogram pack since the beginning of this year, but is still under the government’s official ceiling, he said. However, the supply of rice continues to drop, the price could increase in the third or fourth quarter of the year, Somkiat said. However, rice packers will not immediately increase retail prices as there are still enough stocks to last until September.

He said rice packers had also faced higher costs after modern traders began charging them 10-35 per cent higher entrance fees to sell their products in the supermarkets. Somkiat said rice packers would ask the Commerce Ministry to call for a meeting between rice packers and modern traders to make the entrance fees more fair.According to the association, the price of white paddy rice has increased from Bt7,500-Bt8,000 per tonne early this year to Bt9,000-Bt9,500 per tonne at present, while the cost of packed rice was up from Bt12,000-Bt12,500 per tonne to Bt14,000-Bt14,500 per tonne.

Exports to Africa

Somkiat said that although the government had recently opened bidding for rice in its stockpiles, it should not affect the domestic market as this rice would be shipped to African countries.

Manta Kitprasert, president of the Thai Rice Mills Association, said the drought would force rice prices higher in the near future.

“Rice farmers may not benefit much from the higher price as they have faced losses from the previous harvest season due to the shortage of water. Rice millers have also faced problems about liquidity as they could not find rice for milling and doing businesses,” he said.

Meanwhile, despite the higher cost of palm fruit, the Internal Trade Department will not allow an increase in the retail price of cooking palm oil, which is limited at Bt42 per litre bottle. Wiboonlasana Ruamraksa, director-general of the department, said palm-oil refineries had buffer stocks amounting to about 240,000 tonnes, so a price increase was not warranted.

She said enterprises should be able to shoulder higher costs of production as more palm fruit would enter the market in two months and that would lower its price.

Currently, palm fruit is traded at Bt5-5.5 per kilogram.