Rice crisis : “market mechanisms not speculation”

At last ! At last some common sense from the Commerce Minister.

Commerce and Deputy Prime Minister Mingkwan Saengsuwan on Thursday affirmed that Thailand’s prices of export rice and local paddy had surged in response to ordinary market mechanisms, not in response to any speculation as many worry.

Currently, he said, Thai jasmine rice — khao hom mali — is priced at an average of 34,600-36,000 baht per tonne(US$1,091-1,135), 5 per cent white rice at 26,400-26,700 baht per tonne (US$832-842), and paddy at 17,000-18,000 baht per tonne (US$536-567).

Mr. Mingkwan viewed the prices of export rice and local paddy as reflecting what they should, and that they had not been inflated or manipulated by speculation as many entrepreneurs worried.

In the first three months of this year, rice exports totaled 3.26 million tonnes, up 166.2 per cent from the 1.96 million tonnes shipped in the corresponding period the year before.

Mr. Mingkwan said he believed that Thai rice prices are unlikely to decline for now because the world population had increased and farmlands in many countries had been developed into industrial areas. (TNA)

This kind of speech is refreshing. Accusing the people who hoard and speculate… it’s easy… It can pay on a political level. But it’s of course not enough to explain the current situation (much more complex).

Talking about worldmarket prices, demand, population growth and pressures on lands this is new. And courageous.

To put things into perspectives, here is the FAO Rice Price Indice (based on 16 rices export quotations, 1998-2000 = base 100).

In just one year, between january 2007 and january 2008, the index increased by 28 %…

[for other charts… look here and here]

1 Response to “Rice crisis : “market mechanisms not speculation””

  1. 1 Global Voices Online » Southeast Asia: Rising price of rice Trackback on 12 April 2008 at 5:05 am

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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