China talks over new rice deal

Thailand is in talks with China to sell 1 million tonnes of rice through a government-to-government (G-to-G) deal and vows to secure more sales through similar contracts with buyers including Indonesia, the Philippines, Malaysia and countries in Africa and the Middle East.

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Commerce permanent secretary Chutima Bunyapraphasara said the Commerce Ministry is also poised to sell state rice stocks via a general auction in early August.

She said the new rice deal with China had nothing to do with a deal for 1 million tonnes agreed by the previous government with the Chinese government.

Under the previous deal, Thailand has delivered only 100,000 tonnes, with 900,000 tonnes yet to follow.

The new deal with China will include all types of Thai rice that will be newly harvested, she said.

“With the new harvest about to be supplied to the market, we are now closely working with the private sector to beef up state rice sales and exports,” said Ms Chutima.

“We have set a target of shipping 3-4 million tonnes of state rice stocks and project the country’s overall rice exports will exceed 8 million tonnes this year including those handled by exporters.”

However, Ms Chutima insists the government’s rice sales will be handled over a suitable period. She said rice sales would be delayed during a period of massive new supplies to curb any impact on market prices.

The military regime this month declared it would restart sales of state rice stocks in August, vowing to move an average of 500,000 tonnes a month and dispose of the existing 18-million-tonne surplus within three years.

This will be done mainly through four channels: general auctions, G-to-G deals, direct sales and the Agricultural Futures Exchange of Thailand.

The regime is also committed to revising sales conditions to make them flexible and based on the quality of grain while avoiding selling state stocks on a whole-warehouse basis.

In the event of a dispute or questions about the quality of rice sold, buyers would be allowed to negotiate with authorities.

The previous government’s rice-pledging scheme, which pledged prices at 40-50% above market prices, suffered many setbacks.

The scheme is estimated to have cost the country 500 billion baht, while many officials are suspected of being involved in corruption. 

Former prime minister Yingluck Shinawatra already faces a criminal charge on abuse of authority for her failure to stop the  scheme despite heavy losses and corruption.

The National Anti-Corruption Commission charged her and sent the case to the Office of the Attorney-General to indict her in the Supreme Court’s Criminal Division for Holders of Political Positions.

Meanwhile, finance permanent secretary Rungson Sriworasat has suggested using 100,000 tonnes of rotten rice in state stockpiles as a raw material in the production of ethanol.

Mr Rungson, who is also a board member of PTT Plc, said he had already discussed the idea with executives of the national oil and gas conglomerate, and they agreed it was viable.

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