Commerce Ministry to open rice bidding
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The Commerce Ministry is set to open bidding for its rice stockpile to exporters at the market price next month, aiming to reduce its stocks and rapidly earn back revenue to offset losses from its price-pledging programme.
After meeting with the Thai Rice Exporters Association and the Kingdom’s 10 leading exporters, Commerce Minister Boonsong Teriyapirom said the government would gradually open bidding.
The ministry has set up a working target of exporting 8 million tonnes of rice this year. Boonsong said it would continue to release rice from its stockpiles via several methods to reduce them quickly.
The ministry will soon also meet with the Agriculture Futures Exchange of Thailand to discuss a plan to sell rice via the futures market.
Over the past two years, the government has released about 11 million tonnes of rice from its stockpiles. About 10 million tonnes from the pledging programme remain.
Boonsong admitted that it was inevitable the government would lose money as the market price could not cover the cost of raw materials because of the high initial pledging price of Bt15,000 a tonne.
“The ministry has delayed returning money from its rice sales to the Finance Ministry because the high price of Thai rice [has slowed exports]. The ministry has to accept the market price, although it will face some losses.”
As of this month, the ministry has been able to return about Bt130 billion to the Finance Ministry. However, it plans to return a total of Bt149 billion between March and September.
Boonsong said that from now on the ministry would continue to release rice from the stockpiles to the market. He has instructed the Foreign Trade Department to find appropriate methods to release the rice while ensuring minimal losses for the government.
He added that exporters wanted the government to release rice on a weekly basis.
A source with the Thai Rice Exporters Association said the government needed to release the rice gradually based on transparent bidding.
The source said the price should be at the market level because of heavy competition in the world rice trade.
Boonsong said he would meet with rice farmers soon to discuss their objections to the government’s decision to reduce the pledging price to Bt12,000 a tonne.
Meanwhile, Deputy Commerce Minister Natthawut Saikua said the ministry would send a team to inspect 1,600 rice millers and warehouses nationwide to ensure that the government’s rice stocks would not be stolen and to prove its quality.
The ministry will be able to report the results of the inspection this Saturday.
He said the Internal Trade Department had continued to inspect rice in stockpiles gradually. Between January and June 12, about 4,000 tonnes of rice worth Bt79.81 million had gone missing.
Last year, 32,000 tonnes of rice went missing, worth Bt541.21 million. Natthawut said the ministry had not yet included in its tally the 8,000 tonnes of rice that a miller in Phichit had cheated farmers out of.
