China confirms purchase of 20,000 tonnes of rice

China confirms purchase of 20,000 tonnes of rice

China has agreed to buy 20,000 tonnes of white rice from Thailand through a government-to-government (G2G) deal, scheduled for delivery between June and July this year.

According to Keerati Rushchano, director-general of the Foreign Trade Department, the purchase came after his department negotiated with China National Cereals, Oils and Foodstuffs Corporation (Cofco), a state enterprise that supervises the mainland's annual rice import quotas. Cofco agreed to buy 20,000 tonnes of 5% white rice for US$10.4 million.

The negotiations are part of a joint rice marketing plan between the Commerce Ministry and Thai Rice Exporters Association to drive the country's overall rice exports to 6 million tonnes this year.

The purchase deal is also part of a memorandum of understanding signed in early 2015 by Cofco and Thai officials to buy 2 million tonnes of rice, an offshoot of an investment package between the two countries that includes a high-speed rail project.

Of the total purchase, 1 million tonnes were to be newly harvested grains and the balance older ones.

However, in late 2015 Cofco agreed to sign a purchase deal to buy only 1 million tonnes of newly harvested grains, 700,000 tonnes of which have been delivered.

According to Mr Keerati, the latest deal to buy 20,000 tonnes of white rice has a flexible condition that allows China to import any type of rice from Thailand, with no limit in terms of quantity.

He said the department is trying its best to convince Cofco to sign a purchase deal for the remaining 280,000 tonnes under the 1-million-tonne purchase contract.

The department wants to complete delivery of the remainder from the 1-million-tonne contract within this year, said Mr Keerati.

Last year, China imported 381,363 tonnes of Thai rice, a decrease of 19%, with an export value of $277 million, a decline of 10%.

Thai hom mali rice comprised 137,623 tonnes of the total, with white rice totalling 85,663 tonnes, broken rice 103,549 tonnes with the remainder being sticky rice.

The rice exports were handled largely by the private sector.

Rice shipments to China under the G2G deal were halted for a couple of years, as China delayed its purchases, citing relatively high prices for Thai rice.

The Thai government set a target for rice exports of 6 million tonnes this year, slightly above the 5.72 million tonnes shipped last year.

The export target of 6 million tonnes is expected to include 2 million tonnes of white rice, 1.5 million tonnes of Thai hom mali, and 1.5 million tonnes of parboiled rice.

The remainder is made up of Pathum Thani fragrant rice, provincial fragrant rice and sticky rice.

Thailand exported a total of 7.58 million tonnes of rice in 2019.

Export value tallied $3.72 billion in 2020, down from $4.27 billion in 2019.

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