New Deputy Commerce Minister Yanyong Phuangrach said the ministry plans to urgently sell four to five million tonnes of grain from the rice price pledging stockpile within three months.
From left to right: Deputy Commerce Ministers Nattawut Saikuar and Yanyong Phuangrach join Commerce Minister Niwatthamrong Bunsongphaisan in paying respect to a shrine at the ministry in Nonthaburi province.
Mr Yanyong was speaking as he and new Commerce Minister Niwatthamrong Bunsongphaisan on Monday began their first day of work after being sworn into office by His Majesty the King on Sunday.
He was confident the ministry would be able to sell eight to 8.5 million tonnes of rice this year, as targetted.
Mr Yanyong, formerly a permanent commerce secretary, said the ministry has set an initial release price at US$500 per tonne, but admitted it remains flexible.
The preferred method would still be government-to-government deals, but the ministry would allow the private sector a bigger role in process.
The new commerce minister, Mr Niwatthamrong, said the government is committed to pursuing the rice pledging policy even though it has run into problems because of the excessive stockpile and lack of price competitiveness in the world market.
Also on his first day at work, Mr Niwatthamrong said his mission at the ministry is to release the government rice stockpile, estimated at 17 million tonnes, as quickly as possible.
The rice pledging policy is a hallmark policy of the Pheu Thai party. The government promised to buy "every single grain of rice" from farmers in Thailand at about 30% above market price in 2011 with the hope of cornering the world rice market and forcing up the price. It failed.
Mr Niwatthamrong admitted that Thai rice could not compete in the world market now because the government set the pledging prices too high - 15,000 baht per tonne for ordinary white rice and 20,000 baht per tonne for fragrant rice.
The global rice price has stayed around US$450, or 13,500 baht, for rice
"The rice pledging scheme must continue because it gives rice farmers a better income. Without the pledging project farmers would receive even less from the sale of their rice, because Vietnam is selling their rice at a very low price and India is exporting more," the new commerce minister said.
He would therefore aim at giving farmers the best pledging price possible while making sure that the price of Thai rice remains competitive on the world market.
"Thai rice won't sell on the global market if its price is too high," he said. "When we can't sell the rice, we run into the problem of excessive stockpiles, which causes many other downstream problems."