Ministry reshuffle follows data leak

As scheme bleeds cash, regional rivals pounce

The Finance Ministry has reassigned Supa Piyajitti, a deputy finance permanent secretary, from her role overseeing the debts and expenses group after last week's leaked report predicting big losses for the state's rice pledging scheme.

Ms Supa will now be in charge of the Office of the Permanent Secretary and the Fiscal Policy Office. Pongpanu Svetarundra, another deputy permanent secretary, will move from the Fiscal Policy Office to take her place, according to a letter signed by the finance permanent secretary and made public Monday.

Local media widely reported that losses from the government's most contentious populist campaign - the rice subsidy scheme - are estimated to reach 200 billion baht, up sharply from the Finance Ministry's previous projection of 70-100 billion baht.

The second-half outlook for Thai rice exports remains gloomy, with big importers hesitant to buy more grains for reasons of self-reliance.

Indonesia and the Philippines have opted for reduced dependence on food imports, aiming to raise productivity and cut exports.

Supa Piyajitti has been relieved of her duties as deputy permanent secretary at the finance ministry over embarrassing leaks about the huge cost of the state's rice pledging scheme. (Photo from Finance Ministry website)

Sutarto Almoeso, president of Bulog, the Indonesian state-owned company in charge of rice distribution, said local production is healthy this year and the country is awaiting the outcome of the second-crop harvest during the coming wet season.

"If production is still good, Indonesia will not need to import rice from either Thailand or Vietnam," he said, speaking at the 2013 Thailand Rice Convention in Chiang Mai Monday.

He said current rice stocks in Indonesia are at a level sufficient for 6-8 months of consumption.

Last year the country bought more than a million tonnes of rice, of which 340,000 tonnes came from Thailand.

Mr Almoeso said Indonesia has improved its irrigation systems to support rice farming and aims to generate more than 14 million tonnes of paddy next year, up from its usual 10 million.

The Philippines is making similar moves with a self-sufficiency scheme aimed at increasing rice production from the current 15 million tonnes of paddy a year, according to Orlan Calayag, an executive of the country's National Food Authority.

The Philippines imported nearly 200,000 tonnes rice from Thailand in 2011, but the amount plunged to just 3,377 tonnes last year.

A report of the UN Food and Agriculture Organization estimated global rice output this year at 746.7 million tonnes of paddy, a 2.1% rise from 2012.

While demand from traditional importers slows, Thailand will soon face a new rival, Myanmar, which has vowed to take the lead in rice exports in the years ahead.

Pwint San, a deputy commerce minister in Myanmar, said the country shipped 1.5 million tonnes of rice in the first quarter this year - the most in a decade - and plans to sell 4.5 million tonnes annually by 2020.

He told the more than 600 participants from 40 nations at the convention that Myanmar would welcome investment from foreign countries, especially in Asean, to improve its rice industry.

As of May 26, Thailand's rice exports have fallen by 9.6% year-on-year to 2.3 million tonnes.

But Korbsook Iamsuri, president of the Thai Rice Exporters Association, expects positive news in the second half with the baht signalling an export-friendly depreciation.

"If the falling baht narrows the price gap between Thai rice and rivals to US$50-70 a tonne, it will increase the competitiveness of our rice," she said.

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Writer: Phusadee Arunmas & Wichit Chantanusornsiri