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Baht/$ 33.60/68 (Bid/Ask)
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13,350
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AGRIBUSINESS
CHATRUDEE THEPARAT
The government yesterday signed a letter of intent to sell 100,000 tonnes of 25% white rice a year under a three-year contract with Djibouti as part of its plan to liquidate its 2.1-million-tonne stockpile by the end of September.
The official contract is expected to be signed next week.
The prices, however, have yet to be finalised, as Mahamoud Ali Youssouf, Djibouti's Minister for Foreign Affairs and International Co-operation, yesterday asked for a bigger discount, citing declining world rice prices, according to Commerce Minister Chaiya Sasomsab.
Representatives of the two governments on Monday agreed on a price of US$860 per tonne.
The private sector would be allowed to handle the rice shipments to the Northeastern African country.
According to Mr Chaiya, similar methods would apply to sell the rest of the stock. ''We need to sell all 2.1 million tonnes by Sept 30 to clear warehouse space for the next buying scheme due to start in November,'' he said.
The 2.1 million tonnes represent old rice bought from farmers in 2005.
The stock was expected to rise by 34% to around 2.82 million tonnes after the government bought 1.2 million tonnes of paddy _ equivalent to around 720,000 tonnes of milled rice _ from farmers under a buying scheme that started on June 15.
''We need to deal with the 2.1 million tonnes first, otherwise it will deteriorate and we wouldn't be able to sell it at good prices,'' he said.
The government is paying farmers 14,000 baht per tonne for paddy, equivalent to around $700 per tonne of milled rice, in a bid to support domestic prices during the months of July-September when supply usually peaks.
Mr Chaiya said the government had no plan to extend the current buying scheme that is due to expire on Sept 30.
Chookiat Ophaswongse, the president of the Thai Rice Exporters Association, said clearing the stocks by Sept 30 was unlikely given the size of stock and relatively high asking prices.
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