Bangkok, Oct 26 - Thailand, the world's biggest rice exporter, expects that no more than 5 percent of its 2009/10 rice crop was damaged by this year's monsoon season, which has now finished, a senior agriculture official said on Monday.
"The damage should not be bigger than 5 percent as flood waters have just come and gone, so there's no flood water left that could damage rice fields," said Apichart Jongsakul, secretary general of the Office of Agricultural Economy, part of the Agriculture Ministry.
He said only parts of the low-lying land in the centre of the country had been affected by floods.
That level of damage equates to around 1 million tonnes of the 23.5 million tonnes of paddy that Thailand is forecast to produce in the main crop, harvesting of which peaks in November.
In theory, endemic Thai rice strains can resist for two weeks under water, Apichart said.
The limited extent of the damage was likely to add to downward pressure on prices, traders said.
Paddy prices in some areas where harvesting started earlier than expected had fallen to 7,000 baht ($210) per tonne on Monday from last week's 8,000 baht, one miller said.
The benchmark 100 percent B grade white rice for export was unchanged at $520 per tonne, exporters said.
However, they said the steady prices did not reflect strong overseas demand. Rather, they needed to maintain relatively high prices to offset losses from a firm Thai baht.
UNHAPPY FARMERS
In an about-turn, the government agreed last week to renew its rice-buying scheme in a bid to stop prices falling, although a controversial new "guaranteed price" programme is going ahead at the same time.
Farmers have threatened to stage protests as prices have dropped, in part due to a planned change to the government's rice support programme, under which it wanted to stop buying rice directly from farmers and holding it in state stockpiles.
"Farmers in several provinces are angry at the government as they did not get paid and the government's price guarantee programme has failed," said Prasit Boonchoey, president of the Thai Farmers Association.
Under the new scheme, the government set a guaranteed price for paddy -- currently 10,000 baht per tonne -- and said it would pay farmers the difference if they sold to millers below that.
However, it also set a "reference price", currently 8,000 baht per tonne, and compensation will not cover the total amount for sales below that floor, meaning a maximum possible government payout of 2,000 baht per tonne.
That may not be fully understood by all growers and officials.
"Some farmers complained that they hadn't got paid since they sold rice at only 6,000 baht per tonne. The provincial agricultural official said it was due to delayed paperwork," Prasit said.
Most farmers who are unfamiliar with such paperwork seem likely to turn to the decades-old buying scheme -- even if the total potential price is lower -- which could lead to even bigger government rice stocks.
The government is to buy rice directly at the reference price of 8,000 baht per tonne.
It holds the equivalent of 6 million tonnes of milled rice in its stocks, bought from farmers in previous years to support prices but now hanging over the market and adding to the downward pressure. ($1=33.41 Baht)