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China rice deal on the cards

Posted by pakin On March - 12 - 2015

Thailand hopes to finalise a government-to-government (G-to-G) deal to sell 2 million tonnes of rice and 200,000 tonnes of rubber to China when authorities meet with their Chinese counterparts in early May.

The government will try to convince China to ink the rice deal at the next meeting scheduled for May 6 in Beijing, Commerce Minister Chatchai Sarikulya said yesterday.

He spoke after meeting with Wang Xiaotao, vice-minister of China’s National Development and Reform Commission, in Bangkok about monitoring the progress of a memorandum of understanding (MoU) for the 2-million-tonne rice sale.

The MoU was signed last December for 1 million tonnes each of old and new grains along with the 200,000 tonnes of rubber.

Deliveries of rice and rubber would be set for this year and next.

The contract will be made through the China National Cereals, Oils and Foodstuffs Corporation, the giant state enterprise that oversees rice imports, to ensure transparency.

The transaction with China is unrelated to an earlier deal for 1 million tonnes struck by the Yingluck Shinawatra government.

Thailand has already delivered 300,000 tonnes as part of that deal.

At yesterday’s meeting, the two parties agreed to set up a joint steering committee to study in detail the rice and rubber deals as agreed in the MoU.

Gen Chatchai said Thailand would at the next meeting try to convince China to buy other farm products too.

Charoen Laothammatas, president of the Thai Rice Exporters Association, urged officials to wrap up the talks so that delivery of all 2 million tonnes could take place this year.

“The government should settle the deal with China as fast as possible to reduce price pressure from new supply,” he said.

“Talks with other potential buyers such as African countries for the old grains should also be wrapped up.”

The present government has vowed to dispose of 17 million tonnes of rice in state stockpiles accumulated from the previous government within two years, with 10 million tonnes to be sold this year.

Last Thursday it sold 780,000 tonnes in the second rice auction this year, fetching more than 8 billion baht.

And last month, it endorsed the sale of 496,243 tonnes worth 7.85 billion baht in the year’s first auction of state rice stocks. The Commerce Ministry has called five auctions since last May, selling a combined 1.12 million tonnes for 13.6 billion baht.

The government also early this month secured a G-to-G contract to sell 200,000 tonnes of rice to the Philippines. Gen Chatchai called this latest contract a good sign, as the government in 2014 won its first contract in 10 years to sell 300,000 tonnes of rice to the country.

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