Rice prices in Thailand, the biggest exporter, may jump 50 per cent by the end of the year under a plan by the party favoured to win the July 3 election to buy the grain directly from farmers, said millers and traders.
Yingluck Shinawatra’s Pheu Thai party plans to reinstate a policy introduced by her brother, fugitive former leader Thaksin Shinawatra, to buy unmilled rice at 15,000 baht ($496) a tonne, twice the current level. That would raise costs for exporters and boost the price of shipments to about $750 a tonne from $500, according to a survey of eight millers and traders.
Rice has lagged behind gains in foodstuffs such as corn and wheat over the past year and the grain may be “the commodity which is separating us from a food crisis,” the United Nations Food and Agriculture Organization said in March. A jump in prices in Thailand may boost demand for cheaper grain from Vietnam, the second-biggest shipper, and India.
“If this measure is taken, world prices will definitely increase as Thailand represents one-third of world trade and cannot be ignored,” said Mamadou Ciss, chief executive officer of Singapore-based broker Hermes Investments Pte, who correctly predicted in 2006 that prices would double.