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Think Rice - Think Thailand

Thailand Rice Convention 2015

by Roger Gilbert, Milling and Grain

hink Rice - Think Thailand - That was

the challenge delivered to the 500-plus
delegates, including importers and
buyers, attending the 7th Thailand Rice
Convention in Bangkok, from May
19-21, 2015.
It was a challenge for many of the
speakers as well, who had to address
several industry sectors represented by
attendees ranging from farmers and farm organisations, to rice
millers and manufacturers, and to traders and importers, and none
more so than Prime Minister H.E. General Prayut Chan-o-cha
who officially opened the Convention.
Organised by Thailands Department of Foreign Affairs and
Ministry of Commerce, participants came from over 40 countries.

Celebrated contribution

However, immediately in front of the conference hall was an

exhibition area called The Kingdom of Rice featuring the work
of Her Royal Highness Princess Maha Chakri Sirinthorn and
celebrating the contribution she has made to farmers, and rice
farming in particular and the industry, on her 60th birthday.
It showed off model villages, giving an insight into the
uniqueness of farming life in various regions across Thailand.
It was obvious from these displays that Thai rice production
remains traditional and adhering to inherited wisdom passed
down through the ages throughout Thailand.
Complementing these traditional exhibits were displays
showing off the various rice varieties produced in Thailand,
highlighting winning crops and displaying the many different
products produced today for both local and export markets. A
product now finding a place in the market is rice bran oil.
38 | Milling and Grain

The overriding impression

given to foreign visitors was
the connection being forged
between modern food products
with improved nutrition and traditional farming methods. The
full day conference was followed on day two with a visit to the
industrys DNA testing laboratory and a tour of a rice research
station and rice mill (which MAG will be reporting on in our next
edition).
Thailands new Prime Minister H.E. General Prayut Chano-cha, now completing his first year in his new role, opened
the convention with a wide-ranging presentation that offered
something to all sectors gathered. Despite his military
background, General Prayut Chan-o-cha has a firm understanding
of the importance of rice production to farmers and to the
economy of his country. His messages were clear and direct: that
the Thai rice industry had to accept there was an internal market
price for rice; that his countrys rice farming industry had to work
with other neighbouring rice industries to gain better returns
from the market through co-ordinated growing and marketing
strategies. He said government policies alone could not deliver
higher prices to farmers as had been attempted in the recent past.
However, he spoke of ways to support rice farmers in becoming
more efficient, lowering production costs through the adoption
of research and development, capitalising on organic production,
adopting regional production zones for certain rice varieties and
re-focusing on nutritionally-improved rice varieties such as black,
purple and coloured rice.

The rice debate

The first order of business as the Convention got down to

work was to debate Thailands rice industry outlook for 2015-

F
16. The panel was made up of the Director General of the
Rice Department Chanpithya Shimphalee from the Ministry of
Agriculture and Cooperatives, Honorary President of the Thai
Rice Exporters Association Vichal Sriprasert and the President of
the Thai Rice Mills Association Manat Kitprasert.
The government is attempting to manage the stocks of rice that
accumulated under the previous governments rice production
support policies. With anywhere from eight million to 18 million
tonnes remaining unsold from previous years (no one seemed
to know precisely how much rice was in storage and currently
overhanging the market), the government has to avoid strategies
that will depress prices further to farmers.
Popular policies setting higher prices - meaning that Thai rice
could not be sold overseas - were not right. The industry had
two bosses - the farmers who sell half their surplus production
overseas and traders who are free to buy from India, Vietnam or
others.
When they could sell, farmers sold to the government which
spent trillions to buy up 34 million tonnes when only about 10
million tonnes could be exported, said the panel in the debate.
Three to four years later we still have 18 million tonnes in
store, according to records.
The debaters also agreed that while the Prime Minister would
like to help rice farmers, there was no opportunity to provide
incentives to produce, due to a very low world price of some
8000 Baht per tonne of paddy rice, less than the price of 10
years ago. The price of rice had reached 12,000 Baht per tonne
in some years, but todays prices were bringing misery to both
farmers and millers, they said.
Drought was another factor impacting rice production and
leading to the cancellation of off-season rice growing. It was

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agreed that several industries, such as the oil and the fracking
industries, the iron ore industry through to the iPad, had suffered
price downturns in recent months and years while freight had
gone up. It was unrealistic not to expect commodity prices such
as those for rice to also be impacted. The world market has
shrunk. With no demand, prices do not go up!
There was general discussion about the markets. The role of
China in the marketplace and the fact the industry should wait
and see what China might do with regard to purchases and its
five-million-tonne quota. Traditionally, when China buys the
price goes up, so lets observe and study what China does.
The Director General of the Rice Department Chanpithya
Shimphalee from the Ministry of Agriculture and Cooperatives
said Thailand is the golden land with tens of thousands of rice
varieties.
Rice development has been undertaken over hundreds of
years, and today Thailand has more than 25 rice research
centres working on improving varieties. He saw an opportunity
to develop a premium segment for an organic-low GI rice, a
mid-segment rice that met Good Agricultural Practices with
certification and a third segment of GAP-quality rice that met
40 | Milling and Grain

the required food safety and selling standards required by

international buyers.
What inspires confidence in Thailands farmers is their
professionalism, the fact that they have been growing rice for
hundreds of years and today have the capacity to grow rice to the
standards required, he added.
As pointed out by President of the Thai Rice Mills Association
Manat Kitprasert later in the debate, the government has
undertaken to divert the stored excess rice into biofuel
production, removing it from the market, which is helping
stabilise the sector. He also said the volume of rice in storage was
much less than 18 million tonnes.
He said millers were facing smaller production levels to mill,
down by 30-plus percent, and that international buyers should not
leave it long before making their purchases: If you dont buy
today, when are you going to buy? Half of what was for sale has
already gone, he added.
Mr Manat Kitprasert went on to say that millers were
becoming small scale exporters, especially where organic rice
was concerned. He noted a younger generation of millers were
coming into the market, producing more specialist rice products.

Honorary President of the Thai Rice Exporters Association

Vichal Sriprasert says his association has been involved in
exporting rice for over 100 years. He pointed to per ha yields
and noted that production ranged from nine tonnes per ha at
the high end to just one tonne per ha at the low end. Egypt and
Australia were at the high end while Angola was at the low
end. He also quoted costs per ha in US$ to produce rice, with
Thailand having some of the highest costs at around US$270/
ha. He said one solution being adopted in the USA was to
produce a hybrid rice strain that had lower cost of production.
He suggested that having a vast array of varieties might be
a weak point for Thailand and that possibly focusing on a
limited number of strains is what is needed for export at lower
production costs.
As a final comment, Director General Chanpithya Shimphalee
said that Thai rice farmers had to reduce the cost of production
and that the cost of seed was one area that offered substantial
savings and a way to increase competitiveness.

Notes

Paddy rice is the second most harvested crop globally in terms

of tonnes produced. At 749 million tonnes, it is only exceeded
by corn yields at 1018 million tonnes. Wheat, interestingly
enough, is marginally behind rice at 716 million tonnes.
There are many conflicting data on global rice production,
but FAOStat data, released in 2014 and showing production
based on the 2012 outcome, shows China with 204 million
tonnes of production, India with 153 million tonnes, Indonesia
with 70 million tonnes, Vietnam with 44 million tonnes and
Thailand with 38 million tonnes.
Acknowledgement: Milling and Grain would like to thank
Thailands Department of Foreign Affairs and Ministry of
June 2015 | 41