Rice exporters wary of pledge

Govt promises to sell 6-7m tonnes this year

The government has vowed to sell 6-7 million tonnes of its rice stocks this year, but rice exporters are again questioning the viability.

The Thai Rice Exporters Association is maintaining its export target at 6.5 million tonnes, much lower than the 8 million tonnes set by the Commerce Ministry. TAWATCHAI KEMGUMNERD

Commerce Minister Boonsong Teriyapirom yesterday said negotiations are under way to sell rice to potential buyers such as South Korea, China, Nigeria and Guinea.

He will fly to South Africa for talks on the rice deals over the next two months. Bids will also be also opened to sell rice to local rice packers to expedite releasing the government's stocks.

However, Mr Boonsong did not elaborate on the amount the government should sell through government-to-government (G2G) deals.

Korbsook Iamsuri, president of the Thai Rice Exporters Association (TREA), said it remains difficult to assess whether the government could sell its rice stocks, as it has yet to call an auction for exporters.

"Just one auction would allow exporters to be able to evaluate the estimated prices of the government's rice stocks," she said.

"And the government could achieve the sales target only if it agrees to sell rice at a price the exporters can market."

Ms Korbsook said the baht's appreciation has become a great challenge for rice exports, adding that every one-baht gain affects the free-on-board price for white rice by US$15-20 a tonne.

At present, 5% white rice is quoted at $560 a tonne, with the domestic prices quoted at 15,200 to 15,500 baht a tonne.

"We expect it will be not easy for the government to sell rice if the baht stands strong at 29.30 baht to the dollar," Ms Korbsook said.

The TREA is maintaining the export target at 6.5 million tonnes, much lower than the 8 million tonnes set by the Commerce Ministry.

Ms Korbsook said Thai rice shipments for the first quarter were estimated at 1.5 million tonnes, down by 9-10% year-on-year.

The government delivered only 1.4 million tonnes of rice from its stocks through G2G deals last year despite Mr Boonsong announcing last September that his ministry had concluded six export deals through contracts with Indonesia, the Philippines, China and the Ivory Coast to sell 7.33 million tonnes.

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Writer: Phusadee Arunmas
Position: Business Reporter