DECREASE IN CASSAVA OUTPUT SEEN

       Cassava production is forecast to drop 7.74 per cent to 27.75 million tonnes next year, due to farmers turning more to fuel crops that bring higher prices, especially sugar cane.
       Cassava was planted on 8.29 million rai of land last year, but that is expected to decrease 6.15 per cent to 7.78 million rai.
       Of total cassava production, only 2.5 million tonnes will be used to produce ethanol, while the rest will go towards the manufacture of tapioca chips for export and as a pet-food ingredient for the local market.
       Many factors have hurt production, including insects, lower rainfall, reduced yield per rai and a flow of cassava from neighbouring countries under the Asean Free Trade Area.
       "The drop in production will halt the industry's growth, because there will not be enough raw material for the manufacture of tapioca flour," said Thai Tapioca Trade Association (TTTA) president Seree Denworalak.
       As a result, the tapioca-products industry, including flour, starch and chips, will see flat export growth or only a slight drop next year. For instance, the association predicts this year's export of 2.14 million tonnes of tapioca flour will decline to 2 million tonnes next year. Domestic consumption of the product is forecast at 1 million tonnes next year, same as this year.
       Seree said the yield per rai for cassava is also forecast to drop 1.68 per cent to 3.56 tonne per rai. The farm price for cassava is quoted at Bt1.60 to Bt1.80 per kilogram.
       "The government's guaranteed price is suitable for supporting industry growth and farmers," he said, adding that at that price, exporters could maintain their export competitiveness.
       Moreover, cassava growers spend Bt1.28 to produce a kilogram, down from Bt1.46 in the previous harvest season. The drop in the production cost has been in line with a lower oil price.
       The TTTA has called for the government to control plant diseases and educate farmers about good strain selection.
       Seree said the cassava price could reach Bt2 a kilogram late in the harvest season if the widespread problem of insects was not solved.

Benchmark prices for new rice options programme approved

       The benchmark prices for Hom Mali paddy under the government's new rice option programme have been set at 15,300 baht per tonne. Prices for general provincial fragrant rice were set at 14,300 baht, glutinous paddy at 9,500 baht and second-crop paddy at 10,000 baht.
       However, Commerce Minister Porn-tiva Nakasai said officials were still debating a change in programme criteria,from a maximum of 20 tonnes of paddy per farm family, to a maximum value of 350,000 baht instead.
       The benchmark is 10,000 baht per tonne for 15%-moisture white rice paddy.Farmers' production costs are estimated at 6,000 to 7,000 baht per rai for white rice and 11,096 baht for Thai HomMali.The buying price covers all costs and allows around 30-40% profit.
       The government will guarantee the prices quoted. If farmers sell to millers or exporters for less, the government will pay them the difference.

Paddy-rice guarantee prices agreed

       The National Rice Policy Committee yesterday decided to guarantee Hom Mali paddy rice at Bt15,300 per tonne and paddy rice at Bt10,000 per tonne.
       The committee, chaired by Prime Minister Abhisit Vejjajiva, delayed the decision if the guarantee scheme should limit the the volume per household at 20 tonnes or limit the guarantee value at Bt350,000 per household.
       The Bank for Agriculture and Agricultural Cooperatives estimated that the value limit will raise the government's compensation to Bt43 billion from Bt25 billion.
       Commerce Minister Porntiva Nakasai said after the 3-hour meeting that the decision is delayed as output from each area differs. The bank and the Agricultural Economics Office will jointly survey the figures.
       She admitted that if the volume limit is in place, farmers may earn less than the pledging programme and this may lead to problems. However, if the value limit is in place, the compensation will rise sharply.
       She said the issue should be finalised before the price guarantee programme will kick off in October.