Thailand 7m tonnes under G2G deals planned for this year

The government vows to sell 7 million tonnes of its rice stocks this year through government-to-government (G2G) deals amid lingering concerns among rice exporters that the mission is impossible.

"The claim this time is as usual deemed impossible, except that the government dares to sell Thai rice at price on par with that of Vietnam, now quoted at US$420 per tonne," said a source from the rice trading industry.

The price of Thai white rice 5% now stands between $550-560 per tonne. Vatchari Vimooktayon, permanent secretary for commerce, yesterday unveiled the ministry's latest rice mission, planning at best to sell 7 million tonnes of rice stocks on top of the 7.33 million tonnes Commerce Minister Boonsong Teriyapirom announced earlier. Last September Mr Boonsong announced that his ministry had concluded six export deals through G2G contracts with Indonesia, the Philippines, China and Ivory Coast.

Mr Boonsong's announcement still leaves rice exporters and the rice trading industry in the dark as he remains tight-lipped on details of the transactions, particularly prices or how much each buyer purchased.

No details on the previous rice deals through G2G contracts were available from Mrs Vatchari.

"Say whatever you want [about G2G rice sales] and the amount of rice stocks under the government's memorandum of understanding," the source said. "But the question whether they [buyers] will buy remains unanswered. And this year, India, which controls a large amount of rice stocks, plans to ship all year."

The source urged the government to divulge how it will sell its existing stocks which are likely to amount to 11.5 million tonnes of milled rice, and how it will tackle the estimated 12 million tonnes of milled rice in the new harvest this year. "From the middle of this year, we will start seeing the government having trouble finding warehouses to keep its massive rice stocks," he said. "Meanwhile, rice exporters themselves have to shift to improving rice quality and investing in warehouses to be rented by the government to store its rice stocks. Thai rice exports are expected to be in trouble over the next two years."