BANGKOK: Thai Prime Minister Yingluck Shinawatra has told her commerce minister to clarify the cost of the government's rice intervention scheme, after a warning this week that mounting losses could affect the country's credit rating.
A newspaper report that put losses from the scheme in the 2011-12 harvest year at 200 billion Thai baht ($6.6 billion), equivalent to around 8 percent of the total budget, prompted the warning from ratings agency Moody's.
The government buys from farmers at prices that have made Thai rice uncompetitive on world markets, leading to growing stockpiles and costing Thailand its spot as the world's number one exporter.
It said last week it would extend the politically popular intervention for a third year.
"The prime minister has given the Commerce Ministry the job of making all the figures clear and the commerce minister is expected to hold a press briefing over the next few days," Niwatthamrong Bunsongphaisan, a minister without portfolio, told reporters.
Yingluck came to power in 2011 helped by an election promise to pay farmers 15,000 baht ($490) a tonne for rice, way above the market price at the time.
The intervention scheme has forced up the prices offered by private exporters, with 5 percent broken rice quoted at $540 a tonne on Wednesday, around $150-$170 a tonne higher than the same grade from India, Pakistan and Vietnam.
Commerce Minister Boonsong Teriyapirom said last October that 7.3 million tonnes had been sold in government-to-government deals, to be delivered over several months, but his ministry declined to give any prices or provide fuller details.
Exporters remain sceptical any such deals were reached, citing an absence of port activity. Figures from the Board of Trade of Thailand show 1.54 million tonnes of rice has been shipped this year and none of it has been sold by the government.
Thai exports tumbled to 6.9 million tonnes in 2012, down from a record high of 10.6 million tonnes in 2011. Exporters expect another bad year in 2013, forecasting shipments of just 6 million tonnes. (Reuters)
