China to buy 1 million tonnes of Thai rice
China has agreed to buy one million tonnes of Thai rice over the next five years, Deputy Commerce Minister Yanyong Phuangrach said on Friday.
- Published: 11/10/2013 at 04:25 PM
- Newspaper section: topstories
However, Beijing has denied earlier claims made by Thai officials about other rice orders totalling 1.2 million tonnes.
The deal announced by Mr Yanyong involves China's largest oil, cereals and foodstuffs import and export corporation, Cofco, a state enterprise.
The documents were signed on Friday with the Thai Rice Exporters Association. Cofco would buy rice directly from Thai traders, not from government stocks.
Rice farmers work in a paddy field in Mukdahan province. (Photo by Thiti Wannamontha)
Mr Yanyong did not reveal any details of the price arrangements, but traders were more forthcoming. He also did not say when the purchases would begin.
Asked about concerns about the quality of Thai rice, given that much of it has been stored for a long time, Mr Yanyong said the Chinese buyers could send surveyors to inspect quality of the grain.
Other countries interested in buying Thai rice were also welcome to send people to inspect the quality of the rice, he said.
Chookiat Ophaswongse, honourary president of the exporters' association, confirmed the memorandum of understanding. He said it would involve 200,000 tonnes of Hom Mali, white and glutinous rice annually over a period of five years,
He said rice quality was not a concern as Cofco orders rice from Thai trading firms that are members of the association every year, such as Asia Golden Rice, Thai Fah and Capital Cereals.
The value of the rice purchase deal would be around US$750 million, based on an average price for all kinds of rice at $750 per tonne, Mr Chookiat said.
He said the deal would not affect the price of Thai rice this year, as there would be no deliveries for the moment. Rice prices were expected to increase when the ordered rice is delivered.
A memorandum of understanding is an agreement in principle, not a commitment.
China, meanwhile, has thrown cold water on earlier claims by Thai officials of another government-to-government deal.
Visiting Premier Li Keqiang confirmed that purchases over the next five years would be from private firms, making no mention of 1.2 million tonnes that the government claimed last month as sold in a government-to-government deal.
His comments came in an article published by Thai media and on the Chinese central government website (www.gov.cn).
"Thailand is famous for rice production among other farm products and China is willing to support domestic firms to import 1 million tonnes of Thai rice in 5 years, in addition to other agricultural products," Li wrote in the article.
Commerce Minister Niwatthamrong Bunsongphaisan has said government stocks would fall to 10 million tonnes by the end of the year after 5 million tonnes have been shipped out.
But the Chinese state-owned agribusiness he named as having bought 1.2 million tonnes of Thai rice has denied signing any contract.
"We have never imported Thai rice and we only source rice locally," said an official with the Heilongjiang Beidahuang Rice Industry Group Co Ltd.
Indonesia and the Philippines, the other importers mentioned by Mr Niwatthamrong as buyers, also said no such business has taken place.
"We have bought a total of 205,000 tonnes this year, all from Vietnam," said Rex Estoperez, spokesman of the Philippines' National Food Authority.
"Nothing from Thailand and I am not aware of any recent meeting between the Philippines and Thailand on a rice deal. We don't need to buy more this year."
In Jakarta, Sutarto Alimoeso, chief executive of state procurement body Bulog, said there was no deal with Thailand.
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- Writer: Post reporters, Agencies