Singaporeans agree rice deal

Singaporeans agree rice deal

A scarecrow guards a rice field at an organic agricultural centre in Bangkok. Concerned about drought that could affect food supplies, several countries are rushing to buy Thai rice. PANUPONG CHANGCHAI
A scarecrow guards a rice field at an organic agricultural centre in Bangkok. Concerned about drought that could affect food supplies, several countries are rushing to buy Thai rice. PANUPONG CHANGCHAI

Drought concerns are prompting countries to go on a rice-buying spree, with Singaporean buyers sealing a deal yesterday to buy rice worth 720 million baht from the Thai private sector.

Commerce Minister Apiradi Tantraporn, who last week led Singaporean importers to visit and observe rice cultivation in Ubon Ratchathani, said they would buy the entire 22,000 tonnes of Hom Mali rice produced in the province in the 2015-16 harvest season.

The Singaporeans also plan to buy glutinous rice, but deals have yet to be signed because they believe the price is relatively high.

Singapore is one of Thailand's main rice export markets, both for domestic consumption and re-export.

The city state bought 126,013 tonnes worth 3.99 billion baht in 2013 and 162,577 tonnes worth 5.76 billion baht last year.

In the first 10 months of this year, Singapore imported 99,216 tonnes of Thai rice worth 2.77 billion baht.

Charoen Laothamatas, president of the Thai Rice Exporters Association, said Thailand was expected to produce 6 million tonnes of Hom Mali paddy or 3 million tonnes of milled rice in the 2015-16 season, close to last season's figures.

However, he expects the Hom Mali rice in this year's main crop will be much better in quality thanks to low rainfall that will make it more aromatic.

"We're concerned about the short-term price prospects of Hom Mali rice, as simultaneous harvests nationwide may affect prices to certain extent," Mr Charoen said.

In a bid to stabilise rice prices ahead of the main crop's new release of supply this month and next, the rice policy and management committee last month agreed to delay sales of high-quality rice in state stocks.

The panel will allow the sale of 2 million tonnes of low-quality rice, mainly for industrial use.

The government controls 13.5 million tonnes of rice stocks, down from a combined 18 million tonnes amassed from previous rice schemes.

In a move to stabilise Hom Mali paddy prices, exporters also pledged to buy Hom Mali paddy at a target price of 13,500 baht a tonne or about 26,000 baht a tonne for milled rice from December-February.

Drought conditions are prompting many countries to buy more rice, with the Philippines and Indonesia expected to buy more stocks, Mrs Apiradi said.

The government through the Foreign Trade Department will sign a government-to-government (G-to-G) deal this week to sell 500,000 tonnes of newly harvested rice worth 8 billion baht to Indonesia's rice-buying agency Bulog.

Of the total, 15% white rice will make up 450,000 tonnes, with 5% white rice making up the rest. Delivery is scheduled from this month to next March.

Since Prime Minister Prayut Chan-o-cha took office, Thailand has sold more than 2 million tonnes under G-to-G contracts, with 1 million to be delivered this year.

In September, the government secured a deal to sell 300,000 tonnes of rice to the Philippines' National Food Authority under a G-to-G deal at cost, insurance and freight prices of US$426.60 a tonne. Delivery is due between now and next January.

The government is also set to sign a deal to sell 1 million tonnes of rice to China, with delivery due next year.

The grains, mainly new 5% white rice and Hom Mali rice, are part of a 2-million-tonne lot for which a memorandum of understanding was signed last December.

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