Thailand seals Iran rice deal
Thailand has secured a deal to sell rice to Iran for the first time in 10 years, with delivery of 50,000-100,000 tonnes of white rice due over the next 1-2 months.
Sombat Chalermwutinan, president of Asia Golden Rice Co, said the company has already reached an agreement to sell rice to the Iranian government after Iran's Health and Medical Education Ministry inspected Asia Golden Rice's factory late last year.
Initial purchase demand is 50,000-100,000 tonnes of white rice 5% and 100%.
The company is in the process of asking for cooperation from the Export-Import Bank of Thailand to help handle the payment and settlement system, which is expected to take about one month. Delivery is likely over the next 1-2 months or before June this year.
"The purchase order is considered good news for Thailand after a close partnership between the government and private sector to resume Thai rice shipments to Iran after 10 years as a result of United Nations sanctions," he said.
In the past, Iran used to import 700,000 to one million tonnes from foreign countries, about 300,000-500,000 tonnes of which came from Thailand.
With the easing situation in Iran, Thailand and Iran signed a memorandum of understanding in early 2016 to resume sales of 300,000 tonnes of rice worth 4.3 billion baht.
Thailand and Iran agreed later in October last year to a preferential trade agreement (PTA), a move intended to rev up bilateral commerce to US$3 billion (104.7 billion baht) by 2021.
Both sides have agreed to cut import tariffs on 100 goods.
The PTA differs from a free trade agreement (FTA), as the pact will be much easier to conclude and does not require the need to completely eliminate tariffs. Generally, tariffs will be cut to 10% or less, depending on the outcome of negotiations.
An FTA generally requires that talks cover not only access to goods, but also for investment and services.
Iran is Thailand's ninth largest trading partner in the Middle East. In 2016, two-way trade volume totalled $421 million, up 36.1% from a year before. Exports from Thailand came to $267 million, up 23.1% from 2015.
Commerce Minister Apiradi Tantraporn said good signs have appeared since early this year for Thai rice export prospects, both through government-to-government and private-to-private deals.
The Commerce Ministry expects Thailand to ship 10 million tonnes of milled rice this year, but the Thai Rice Exporters Association said shipments would amount to 9.5 million tonnes.