Ministry to release 18m tonnes of rice in next 3 years
July 11, 2014 00:00
By Petchanet Pratruangkrai
The Commerce Ministry will soon start the gradual release of 18 million tonnes of government rice over three years.
Duangporn Rodphaya, acting director-general of the Foreign Trade Department, said yesterday that the junta is considering the methods and plans for selling rice very carefully, as it does not want to upset market prices while farmers are getting no subsidies from the government.
However, this government does not need to accelerate sales of rice from its inventory – like the previous government did – because there is no pressure to generate revenue to make overdue payments to farmers, as that has already been done.
Some of the stored rice could also be kept as security or buffer stocks, as the current government has no policy to subsidise rice or purchase rice in the market.
Under the rice-release plan, the department will not have to wait for the completion of rice stock inspections. The department is negotiating with trading partners and rice traders to sell rice under many methods.
It will continue selling rice through government-to-government (G-to-G) arrangements, the futures market and the Agriculture Futures Exchange of Thailand.
It will also open public bidding to foreign and local traders, exporters and small traders.
Thailand has a sales contract with China for 1 million tonnes of rice. The ministry has already shipped about 100,000 tonnes under the contract. The government will continue supplying rice to China under this contract, while negotiating with other countries to sell more rice from stockpiles.
After suspending rice release when the National Council for Peace and Order assumed control of the country, the department is set to restart the programme next month. It plans to sell about 500,000-600,000 tonnes of rice a month during this half of the year.
The government is confident that Thailand can ship out about 8 million to 10 million tonnes of rice this year.
Thailand exported 5.35 million tonnes worth US$2.7 billion during the first half, which was an increase of 50 per cent in volume and 19 per cent in value.
The department will meet buyers and agencies in Asia and Africa starting late this month. It is focusing on these two markets as they account for 60 per cent of the country’s rice export volume.
The department will try many methods under a transparent process to allow every trader to join the rice sales of the government. There would be no bribery or under-the-table payments to officials.
“Every baht from rice sales will be returned to the government. Traders can quote the highest price they can, as there will be no additional cost for them,” she said.
However, the government will need to face losses from selling rice, as the pledging price was high.
But thinking positively, the government needs to sell rice at the market price in a bid to minimise operating expenses, including stocking and warehousing costs.
The government may also not get good prices, as some of the rice may not meet standards because some stocks have not been kept in good condition and some have deteriorated in quality. But some stocks follow standards and are still stored in good condition.
Consumers and foreign buyers should feel confident about Thai rice quality. Most stocks were of good quality. Only less than 20 per cent of the rice that was inspected by the special teams was found to have poor quality because they were not kept in good conditions.
Permanent secretary Chutima Bunyapraphasara said the ministry would drive export growth to at least 3.5 per cent this year, while continuing to monitor the domestic market and ensure a low cost of living.
The ministry will try to boost export growth beyond 3.5 per cent this year. Although the European Union suspended free-trade talks with Thailand, officials from both sides are still holding technical discussions.
The EU may not cut all of the generalised system of preferences for Thailand, while Thai operators could adapt to changing circumstances.
Chutima vowed to manage the ministry with transparency and to speed up problem-solving to help facilitate trade.
The inspection of rice at warehouses nationwide bought from farmers by the now defunct government under its rice-pledging scheme was expected to be wrapped up late next month, said Panadda Diskul, permanent secretary of the Prime Minister’s Office.
All 100 rice inspection teams were exerting every effort to check stocks at all granaries and silos.
The findings will be submitted to General Prayuth Chan-ocha, Army chief and director of the National Council for Peace and Order, before being announced to the public.
The in-depth inspection of rice quality was expected to be completed in September.
Both the National Anti-Corruption Commission and Public Sector Anti-Corruption Commission have the duty to take legal action against cabinet members in the previous Yingluck Shinawatra government for alleged corruption, he said.
His teams are responsible for inspecting rice quality. It is not their duty to punish those involved with corruption in the rice-pledging programme.