Push to close G-to-G China rice deal

Push to close G-to-G China rice deal

Commerce Minister Apiradi Tantraporn will visit China this week to persuade officials to sign a rice deal on a government-to-government basis (G-to-G).

The minister is scheduled to fly to Beijing on Friday to talk to Chinese authorities about signing for 1 million tonnes of rice as part of the Sino-Thai high-speed rail agreement, said commerce permanent secretary Chutima Bunyapraphasara.

Mrs Apiradi also aims to convince China to buy more farm products such as rubber and tapioca that are in demand.

Thai officials and their Chinese counterparts signed a memorandum of understanding (MoU) in December 2014 for 1 million tonnes each of old and new rice along with 200,000 tonnes of rubber. The MoU was part of the high-speed rail plan. Delivery was scheduled for 2016.

The two parties signed an agreement late last year for the first 1 million tonnes under the MoU.

"Despite the Thai government's recent decision to wholly invest in the proposed Sino-Thai high-speed rail project, we remain positive that China will honour the MoU and agree on the rice deal for the remaining 1 million tonnes," Ms Chutima said.

The government also expects to finish delivering the remaining 100,000 tonnes of rice to China under an earlier deal for 1 million tonnes struck by the Yingluck Shinawatra government.

Ms Chutima said that given the widespread drought conditions expected to trim global supplies, Thailand could ship more than 9.5 million tonnes of rice this year.

"If the drought is prolonged, we still believe Thailand has full capacity in rice exports, as the national rice policy committee has allowed flexible means in selling state rice stocks either through G-to-G contracts or general auctions," she said. "And with the latest development, the committee has approved a direct-sales proposal to rice buyers who have export markets and foreign traders."

A panel is working on the terms of reference for direct sales.

Ms Chutima is scheduled to fly to South Africa and Mozambique in June to pursue more rice sales to African countries.

The government holds 11.4 million tonnes of rice in its stocks, down from 18.7 million accumulated under previous subsidy schemes that bought rice from farmers at prices 40% above market rates during 2011-14.

Since the May 2014 coup, a combined 5.05 million tonnes of rice has been sold via 13 auctions, fetching 53.9 billion baht, while G-to-G deals unloaded 3.8 million tonnes for 50 billion baht.

According to the Commerce Ministry, the first three months of 2016 saw Thailand ship 2.85 million tonnes, up 34% from the same period last year.

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