pledging may

The Commerce Ministry may have to put off its rice-pledging programme scheduled for the middle of this month because the Finance Ministry has not given it any budget support.

The government was set to offer by October 16 a price of Bt14,000 per tonne for eight million tonnes of main crop paddy rice.

The Finance Ministry has attacked the guaranteed price as too high, saying it would not provide financial backing for this scheme, as it would cost more than Bt120 billion.

However, Commerce Minister Chaiya Sasomsub refused yesterday to lower the guaranteed price, saying that it had to take the previous pledging programme for the second crop into account.

"If the government revised the guaranteed price down to Bt12,000 a tonne for the main crop, the ministry would lose about Bt8 billion on the decrease in value for rice in the government's stockpiles," he said.

To ensure that the government will have enough budget for the upcoming mortgage programme, the ministry has already announced the release of 4.4 million tonnes of rice in its stockpiles to rice exporters.

The ministry is considering many channels for disposing of this stock, including government-to-government contracts, contracts directly with rice exporters, and open bidding, he said.

The ministry may not open direct bidding as usual but will bargain with interested exporters for the best price, he said.

The ministry will continue to provide amnesty for 40 blacklisted millers that have not seriously disobeyed the ministry's regulations to ensure enough warehouse space would be available to store the new rice crop, he said.

Chookiat Ophaswongse, president of the Thai Rice Exporters' Association, said the association has not yet received the government contract for its rice sale.

He said the ministry was going in the wrong direction by guaranteeing rice at too high a price, which would cause prolonged problems for the government due to the lack of financial support.

"The government must revise down the guaranteed price or should reduce the volume for this pledging from eight to four million tonnes of white paddy rice," he said.

Although the government thinks that selling old rice will generate funds for use in the upcoming pledging project, only a few exporters would show interest as demand in the world market is low and the gap between Thai and Vietnamese prices is high, he said.

Thai rice is quoted at US$180-$200 a tonne higher than Vietnamese rice, which has caused difficulties for Thai rice exporters.

An industry source said the government's plan to unload rice stocks by contracting directly with some exporters might open the way for corruption, as it was not transparent.

Finance Minister Suchart Thadathamrongvech ordered the Government Savings Bank to lend about Bt10 billion to the Bank for Agriculture and Agricultural Cooperatives to finance the government rice-pledging programme.