Billionaire trader DHANIN CHEARAVANONT has an idea to buy stability in Thailand I By Chaniga Vorasarun   

Thais are the worlds largest exporters of rice and would seem situated to profit from the recent price spike. But many have   been unhappy. When prices soared last spring, consumers were pinched, and the government responded by releasing rice stocks to help buyers. They eventually ended the scheme when a summer bumper crop and Vietnam's reentry  into the market      caused prices to fall. But farmers were hurting and the government intervened again, giving   temporary   aid to farmers and   buying stocks for 14,000 baht per ton. While the government tries to please competing interests,  Charoen Pokphand Group Chairman    Dhanin Chearavanont has a response. Fourth on our   list   of   the   richest Thais and with his family worth $2 billion, Chearavanont has profIted handsomely from agribusiness. His CP Group is a rice trader as well as a purveyor   of   animal feed, pharmaceuticals and real estate among other businesses. His CP Intertrade accounts for 6% of the total rice exported from Thailand, 600,000 tons a year.

 

 

We shouldn't use the word cartel. The five exporting countries need to get together and discuss how we are going to keep the supply of rice high and set the price of rice so it will encourage farmers to keep growing it instead of shifting to other crops. We must look into the problem of how to eliminate poverty among farm­ers' as 70% to 80% of Asian populations are engaged in agriculture. Solving poverty in Asia must start with agricul­tural prices. In Thailand in particular, rice farmers are poor because the price of rice has been intentionally kept low so that the urban population can consume inexpensive rice. The result is that rice growers will turn to grow­ing other crops like cassava, corn, rubber or sugarcane which can earn them better income, and we will end up facing a rice shortage.

 

Even if the price of rice is higher now and could benefit rice growers with more income now, there is still the need for the five to six rice exporting countries to discuss their cooperation. This is to ensure that we will have enough land for rice in the future and that farmers or rice growers will not turn their land into other crops.

 

This is not an attempt to set the price to distort market price mechanisms. It is just an attempt to look for the most appropri­ate prices that could be enough of an incentive to prevent rice growers from shifting to other crops. Is this wrong?

 

High prices of rice 40 not benefit rice exporters at all. The higher the price, the more difficult it is to sell and the less prof­its made. There is not a single Thai rice exporter who wants to buy with higher prices from rice growers and sell at even higher prices on the market. My idea of raising prices doesn't benefit my business. CP Group doesn't grow rice but it has to buy rice from rice farmers at much higher prices.

 

 

Inflation and the cost of living are already up. Income cannot remain unchanged. These poor people will not be able to live their lives normally. Raising wages of the poor in a cost-pushed inflationary situation is not inflationary in itself. I think 30% of the cost of living of low income workers is affected by the higher price of rice and agricultural produce but the other 70% by the higher price of oil. Rice prices can be brought down if oil prices are lowered, if the V.S. uses less corn to make ethanol and Brazil stops using all of its agricultural produce to make ethanol. If oil prices come down, so will food prices.

 

 

In Thai politics, people get angry eas­ily and also forget easily. We have the king who is a pillar of strength who keeps Thailand peaceful.

Forbes Asia, September 15, 2008