Govt to sell tapioca stockpile to China at big loss

Commerce Minister Boonsong Teriyaphirom said the ministry would sell its tapioca stocks to China in order to clear out its warehouses.
“The ministry recently negotiated with the Chinese government to sell the tapioca, as the country has high demand for tapioca products. The price should be quoted close to the market price,” Boonsong said.
However, he declined to disclose either the volume or price of the tapioca to be sold under the deal.
Reports show that Thailand has more than 9.5 million tonnes of tapioca products in its stockpiles. Of the total, tapioca starch accounts for 7.8 million tonnes and tapioca chips the remainder.
Cassava is trading at Bt2.60-Bt3 per kilogram, resulting in a tapioca-chip price of Bt6.40-Bt6.50 a kg. Tapioca starch is priced at Bt13-Bt13.20 a kg. The average export price for tapioca chip is at US$230-$235 (about Bt7,250-Bt7,410) a tonne, while tapioca starch is priced at $440-$450 a tonne.
If Thailand exports tapioca at the current prices, it will face a loss of about Bt1 a kg.
The government plans to release its tapioca products through four channels: bids open to the public; government-to-government contracts; trading in the futures market; and specially negotiated deals with individuals.
Seree Denworalak, president of the Thai Tapioca Traders Association, has called on the government to immediately investigate the cassava-pledging project, saying excessive amounts of the commodity have entered the government’s pledging scheme.
He pointed out that an exaggerated volume of cassava entered the pledging programme from February 1 to June 30. Normally, less cassava should be harvested at the end of the harvest season in June.
“The association is very concerned that the government could face huge losses by subsidising cassava from neighbouring countries,” Seree said.
Thailand is the world’s third-largest tapioca producer after Nigeria and Brazil.