China National Cereals, Oils and Foodstuffs Corporation (Cofco), a Chinese state-owned food conglomerate, yesterday signed a memorandum of understanding (MoU) with Thai rice exporters to buy 1 million tonnes of rice over five years.
Korbsook Iamsuri, president of the Thai Rice Exporters Association (TREA), said China intends to buy about 200,000 tonnes a year with a requirement that purchases must be new grains.
The MoU has yet to stipulate the types of rice China wants to buy.
Normally, China has bought Thai rice from the private sector through TREA members such as Asia Golden Rice Co, Thai Hua (2511) and Capital Cereals Co.
Ms Korbsook insisted the purchase has nothing to do with the government's existing rice stocks and the recently announced deal to sell 1.2 million tonnes of rice to China.
"Nonetheless, we are glad Cofco at least shows an intention of buying rice from exporters," she said.
Chookiat Ophaswongse, honorary president of the TREA, said the private sector is still wondering whether the rice Cofco wants to buy as stated in the MoU is the same amount that China has already bought annually from Thailand.
China usually buys about 300,000 tonnes of Thai rice a year.
Mr Chookiat said the MoU with China is unlikely to boost the price of Thai rice.
Deputy Commerce Minister Yanyong Phuangrach said the government is willing to allow Cofco and any foreign agencies inspect the quality of rice in the government's stocks to ensure their confidence.
Contamination concerns have mounted recently after the Foundation for Consumers and its associates announced their own findings in July that 34 of 46 packed rice samples contained varying amounts of methyl bromide, an odourless, colourless gas used to fumigate rice.
Surasak Riangkrul, director-general of the Foreign Trade Department, yesterday said his department has set a target of shipping 8-10 million tonnes of rice next year compared with an estimated 8-9 million tonnes this year.
Sales through government-to-government contracts will comprise up to 60% of next year's total, he said.