The global price of Hom Mali fragrant rice has dropped to the lowest in six years as growers sell their grain direct to millers-cum-exporters instead of joining a state-run bank's scheme to increase rice prices.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said Hom Mali rice was now at US$720-730 per tonne, compared with its previous peak of $1,200 per tonne and $810-820 per tonne for Cambodian fragrant rice, Post Today reported on Friday.
The millers, who were also exporters, were buying Hom Mali paddy from farmers at 9,500 baht ($265) per tonne compared with the government's targeted price of 13,500 baht ($377) per tonne, he said.
One reason was the high yield from Hom Mali rice, Mr Chukiat said. He expected the global price had bottomed out because orders should increase in mid-December to meet demand during the Chinese New Year festival early next year.
A source in the rice trade said another reason for the low Hom Mali price was that farmers were not participating in the government's scheme to pledge their rice with the state-run Bank for Agriculture and Agricultural Cooperatives (BAAC).
The scheme, set for implementation in the fourth quarter of this year, is aimed at encouraging farmers to delay selling their rice and wait for a higher price and the development of direct markets for rice growers.
Farmers feared the BAAC would deduct money from their pledged grain to repay their debts with the bank, so they were selling rice to millers instead, the source said.
The falling price of Hom Mali rice has affected the purchasing power of farmers in the North and the Northeast, where most of the crop is grown. Hom Mali is sold overseas as Thai Jasmine rice.