Rice shippers scoff at forecast

The government expects to deliver 2.5 million tonnes of rice through government-to-government (G2G) contracts this year amid scepticism from the private sector that the goal is daunting, given the relatively high price of Thai rice and burgeoning supplies.

"The target can be achieved but only in the case that the government sells its rice stock at loss," said Sompong Kitireanglarp, president of the rice exporter Ponglarp Co Ltd.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, agreed that given the abundant world rice production expected this year and the high-priced Thai product, the odds are long for the state to sell its rice stocks profitably.

Thai 5% white rice is now quoted at US$590 a tonne, while similar rice from Vietnam is quoted at $390-400.

"This year's overall rice market still belongs to the buyers, not the sellers," said Mr Chookiat.

"The government can sell its rice stocks in any amount it claims if it dares sell its rice stocks at prices of $420-430 a tonne."

The government delivered 1.4 million tonnes of rice from its stocks through G2G deals last year.

A Commerce Ministry source said the government plans to deliver 2.5 million tonnes of rice by year-end including 38,000 tonnes that have been delivered to Ivory Coast so far.

Vatchari Vimooktayon, the commerce permanent secretary, earlier this year announced the ministry planned at best to sell 7 million tonnes of rice stocks on top of the 7.33 million tonnes previously announced by Commerce Minister Boonsong Teriyapirom.

Last September, Mr Boonsong said his ministry had concluded six export deals through G2G contracts with Indonesia, the Philippines, China and Ivory Coast.

The ministry source said several African nations including Togo, Guinea, Cameroon and Chad are interested in Thai rice.

Togo imports 200,000 to 300,000 tonnes of Thai rice a year, mostly in the form of white and parboiled rice.

Most recently, Togolese authorities sent a letter of intent to the Commerce Ministry to buy 100,000 tonnes of rice.

But the source said Togo still owes $1 million to Thailand for past rice deals, so the new purchase needs approval from the National Rice Policy Committee.

African countries are expected to remain the key buyers of Thai rice, followed by China, said the source.

Thailand shipped 3.57 million tonnes of rice to Africa last year, making up 51% of total rice exports.

Overall rice exports totalled 6.94 million tonnes, down by 35% from 2011.

The UN Food and Agriculture Organization recently said rice stockpiles in Thailand will surge to a record high this year, driven by the government's pledging scheme.

Milled holdings may jump 40% to 18.2 million tonnes in 2013, the Rome-based agency said in its latest report on the global rice market.

The reserves, which averaged 5.4 million tonnes a year from 2008-10, increased to 7.8 million tonnes in 2011 and are still rising, said the report.

It said government stock-release plans have progressed slowly, further aggravating the supply situation for an export sector that is faced with little offshore demand.

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Writer: Phusadee Arunmas
Position: Business Reporter