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US fear over Thailand rice dumping 'groundless'
Publication Date : 20-10-2012
Thai Commerce Minister Boonsong Teriyapirom yesterday vehemently defended the government's rice-pledging policy, saying it had not breached any commitment under the World Trade Organisation (WTO) as the measure was aimed solely at helping domestic farmers.
He also insisted that Thailand had no intention of dumping rice in the world market. To the contrary, it wants to push up rice prices to boost farmers' incomes, he said.
The comment came after the USA Rice Federation raised a concern with the US Trade Representative that it feared Thailand would eventually dump rice on the global market. The federation has also urged the WTO to investigate whether the rice-subsidy programme breached the Kingdom's obligations under the organisation.
"The Thai government has shown its clear stance that we want to raise farmers' incomes," Boonsong said. "The rice-pledging measure is a policy of the government that is only aimed at helping domestic farmers."
The minister stressed that Thailand had no intention of competing unfairly in the global rice market via any dumping tactic.
However, he warned, if foreign farmers or rice traders insisted on filing the case to the WTO, the Thai government was ready to provide information defending the policy and to explain it on the international stage.
Boonsong asked, if the government had aimed to dump rice, why had Thailand lost its status as the world's rice-export champion, slipping to third after Vietnam and India?
Moreover, he noted that the price of Thai rice had not dropped over the past year. In fact, compared with its competitors, the price of rice is quite high. However, the price of US rice is higher because of its higher production costs.
Boonsong added that Thailand's government-to-government rice contracts had not caused prices to drop. The G2G deals were agreed by both the selling and the buying country in line with the market price.
According to the Thai Rice Exporters Association, the price of Thai rice has gone up during the past week. As of Wednesday, 100-per-cent white rice was quoted at US$599 a tonne, up from $588 a week earlier. The price of 5-per-cent white rice rose from $571 to $583, and Thai jasmine rice increased from $1,143 to $1,148 a tonne.
The price of US 100-per-cent white rice is quoted at $620 a tonne. India's 5-per-cent white rice is traded at $450, while Vietnam's is $440 a tonne.
A senior source in the Commerce Ministry said Thailand's agricultural subsidy should not breach any WTO obligations. Thailand has the right to subsidise the agricultural sector by up to 7 per cent of the total value of farm products and commodities. The exact amount of subsidy would be very complicated depending on each crop's value, the source added.