Thailand extends buying scheme, risks adding to rice pile
BANGKOK (REUTERS) - The Thai government on Tuesday approved an extension of its rice buying scheme that will slightly lower prices and quantities, but not by enough to prevent another mountain of the grain being delivered to state-run warehouses.
The intervention, which would have expired in September, has seen the government spend 600 billion baht (S$23 billion) to buy rice since Prime Minister Yingluck Shinawatra ramped up the minimum price in 2011 to shore up support for farmers.
Most of the grain has ended up in government stores that now stand at around 17 million tonnes, and another 10 million tonnes looks headed that way as the government struggles to sell the overpriced grain.
With prices for benchmark Thai rice RI-THWHB-P1 falling by nearly a fifth since April to a two-year low of US$470 (S$600 )a tonne, the scheme threatens to become even more costly as bulging stockpiles force the government to sell at a loss.