Ministry seeks to resume small-lot rice sales in August

Economy July 24, 2014 00:00


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THE COMMERCE MINISTRY is preparing to resume selling rice from its stockpiles in early August, gradually releasing it in small lots of about 500,000 tonnes a month.

Duangporn Rodphaya, director-general of the Foreign Trade Department, said a subcommittee had agreed the ministry should go ahead and sell rice from the stockpiles and not wait for completion of a junta-ordered inspection of the stocks.

The rice-release plan, which will be proposed to the Rice Policy and Management Committee soon, includes sales through general auctions to exporters and local traders, by government-to-government contracts, and through the Agricultural Futures Exchange of Thailand.

Duangporn added that the department would ensure the stocks are released transparently, with the Finance Ministry and the Prime Minister’s Office jointly inspecting the process.

The department reported that about 55 per cent of 1,800 rice warehouses had so far been inspected by the teams dispatched by the military’s ruling National Council for Peace and Order. The teams are expected to complete their mission by the end of September.

About 18 million tonnes of rice is reported to be in the government’s stocks.

Duangporn said the market price for rice had been trending upwards because of concerns over drought and lower production in many countries, amid higher demand in many others. There is a good possibility that Thailand will export 10 million tonnes of rice this year. It is expected to sell off all 18 million tonnes in its stockpiles within three years, she said.

The department reported that Thailand was able to sell 5.35 million tonnes of rice in the first six months, up by 50 per cent year on year, while export value rose 19 |per cent to US$2.7 billion (nearly Bt86 billion).

As of July 16, the price of 5 per cent Thai white rice was quoted at $427 a tonne, up from $410 the previous week.

She added that production of Thai paddy rice in the 2014-15 harvest season was projected to be less than 38 million tonnes because of drought in many areas.

Charoen Laothamatas, president of the Thai Rice Exporters Association, said the government should consider selling rice from its stockpiles in small lots of about 100,000-200,000 tonnes per auction to avoid impacts on the market price.

“The government has less pressure to accelerate the sale of rice from the stocks. The country has ‘holder power’. It should ensure transparency and minimum impacts to the market,” he said.