Thailand offers $1 bn loan to struggling jasmine rice farmers

Thailand's rice management committee said on Monday it will offer loans worth $1 billion to jasmine rice farmers struggling with falling prices, on a condition that they store the grain for six months to slow down market supply.

The new rice harvest season is currently underway in Thailand, the world's second-biggest rice exporter, and the Southeast Asian nation expects output of the grain for the 2016/17 production year to come in at 25 million tonnes.

Prices for jasmine rice, Thailand's highest quality rice, have tumbled to their lowest level in years, leaving the military government scrambling to appease the country's farmers.

The 35.8 billion baht ($1.02 billion) loan scheme, which will be implemented by Thailand's state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC), is aimed at curbing an oversupply of jasmine rice in the market and stabilising prices, said Commerce Minister Apiradee Tantraporn.

‘If we can push up prices of jasmine rice, prices of other rice varieties will go up too,’ Apiradee told reporters in a news conference in Bangkok on Monday.

The loans will be provided to 2 million farm households to hold on to their jasmine rice stocks for six months, said Supat Eawchai, the bank's assistant manager.

The government will follow up with other measures to help improve rice prices, Apiradee said.

Prices for Thai 100 percent jasmine rice were quoted at $725 per tonne, FOB Bangkok, on Friday.

It was the lowest since hitting $710 a tonne in January 2008, according to Reuters data.

Thai jasmine rice made up 25 percent of Thailand's total rice exports from January to August this year, according to data from the Thai Rice Exporters Association.

The commerce ministry said this month its rice export push for the last quarter of 2016 will help support Thai rice prices during the annual harvest period.