Thailand Commerce Ministry believes it can sell rice stockpile

The Commerce Ministry will sell mostly white rice from its huge stockpile, says permanent secretary Yanyong Phuangrach.

The sales could involve calling bids, government-to-government transactions, or so-called special methods.

The ministry holds 10.7 million tonnes of various types of rice acquired through the pledging programme, acquired at prices far above real market rates.

About 14.6 million tonnes of paddy will translate to 9.6 million tonnes of milled rice accrued from the 2011-12 season, with 6.8 million tonnes from the main crop and 7.8 million tonnes from the second crop.

It is expected that mortgaged paddy from the second crop will rise further as the programme will finish by the end of next month.

The government has paid 15,000 baht a tonne for white rice paddy, and 20,000 baht for fragrant Hom Mali paddy.

Despite the massive stocks, Mr Yanyong said the government would continue with pledging as 17 million farmers have benefited from the programme. "If these people earn a high income, it will eventually prop up the economy," he said.

Several agencies including the National Economic & Social Development Board have suggested the government dismantle the programme, citing huge losses as Thai rice prices are much higher than global prices.

But Mr Yanyong remains confident Thailand will be able to export up to 9 million tonnes of rice this year.

Rice prices have been increasing following reports that some producing countries have had smaller output this year due to weather patterns.

Thailand is on course to produce about 30 million tonnes of paddy this year despite last year's floods ravaging several rice fields, he said.

The National Rice Policy Committee approved the ministry taking out 100,000 tonnes of rice from the stock to sell domestically, he added.

Half will be set aside for the Public Warehouse Organisation to repackage for sale at cheap prices. The balance will go to state-backed Took Jai shops and Blue Flag shops that sell consumer products at discount prices.

Commerce Minister Boonsong Teriyapirom said Cote d'Ivoire had expressed interest in buying 200,000 to 300,000 tonnes of rice from Thailand.