So just how reliable is Prime Minister Yingluck Shinawatra’s claim that China has committed to buy one million tonnes of rice and 200,000 tonnes of rubber annually from Thailand for an indefinite period through government-to-government deals?The claim of revised rice and rubber deals with China came one day after visiting Chinese Prime Minister Li Keqiang told the Thai parliament on Friday that China agreed in principle to buy one million tonnes of rice and 200,000 tonnes of rubber over a five-year period through private deals with exporters. A memorandum of understanding based on this was signed the same day.So instead of reassuring people, the prime minister’s claim the following day of a sweetened government-to-government deal has served only to confuse rice exporters and the opposition Democrats.
The lingering questions in the minds of the doubters are: How is possible that China suddenly revised the figures only one day after the signing of the MoU? When was the meeting between the two prime ministers which led to Prime Minister Li becoming more generous and agreeing to buy more rice and rubber from Thailand by G-to-G deals?
Obviously, the claim was unilateral and there has been no response yet from the Chinese side.Democrat Party leader Abhisit Vejjajiva said he would be pleased if the government could sell one million tonnes of rice to China a year for even five years.
But he would like the government to produce evidence in writing to prove the existence of a sweetened deal. So far, there has been no response from the prime minister, who personally made the claim.
Nor has Deputy Prime Minister and Commerce Minister Niwatthamrong Bunsongphaisan come up with any proof of the latest deal.Personally, I don’t find this confusing claim strange. In fact, it is very typical of this government’s handling of the rice issue and, in particular, the rice pledging scheme, which has been totallty opaque from the start.
All information about rice deals, the price of rice sold, the amount of rice in the stockpiles, is kept secret. And even the information occasionally dribbled out by the Commerce Ministry is questionable and needs double or triple checking to determine its accuracy and credibility.Take for example this piece of information from the ministry last week. The ministry is to seek the cabinet’s consent to set aside a seven billon baht fund to compensate for rice taken out of the stockpiles and donated to flood victims domestically and to other countries.Seven billion baht in donations is a huge amount of money – probably a record donation by the Commerce Ministry. Translated into rice, it amounts to more than 500,000 tonnes of rice, calculated on the basis of the market price of US$450 per tonne, or about 370,000 tonnes calculated from the basis of the cost price to the government, which is about 40% above market price.Again, there are no details about which countries received the donated rice, and how much each received. Or in the case of domestic donations to flood victims how many tonnes of rice, or how many rice packs, were distributed, when and where?Since reporters did not ask the questions that they were supposed to ask, the Commerce Ministry can just take it for granted that they were satisfied with whatever information they were spoon-fed, just like the latest claim of the sweetened Chinese rice deal.Sooner or later the truth will come out, but the future for Thai rice remains bleak. The US Department of Agriculture estimated that rice reserves in Thailand would increase 24% to 15.5 million tonnes in 2013-14 as global output overall rises 1.7% to an all-time high of 476.8 million tonnes.Moreover, the price of 45% broken Thai white rice, an Asian benchmark, will drop an estimate 12% to US$390 a tonne by next April, a five-year low, according to the median of eight trader and analyst estimates compiled by Bloomberg.I really wish the Commerce Ministry luck - and certainly it needs a lot of luck – in the hope it can really sell more of our rice.