Govt pins hopes on Afet rice sales
The government is confident that it can gradually release rice from its stocks through the Agriculture Futures Exchange of Thailand, which is a transparent and efficient platform to predict the rice price in the future.
“Many bidders, both Thai and foreign, are expected to join rice trading in the futures market because the mechanism is clear to all. The price should also reflect real demand in the market,” Wiboonlasana Ruamraksa, director-general of the Internal Trade Department, said yesterday.
The first lot of 100,000 tonnes of 5-per-cent white rice and 40,000 tonnes of jasmine rice will be traded early next month. It will be the first time for the government to allow foreign traders to join the auction through Afet.
The government will continue to clear out its inventory via many methods, she said. This year, the Commerce Ministry has allocated 500,000 million tonnes of government rice to trade in the futures market. Each lot will be about 20 tonnes per warehouse. Traders will check rice quality before joining the auction.
The warehouses that participate via the futures market are mostly in central provinces such as Suphan Buri, Nakhon Sawan and Chai Nat.
The ministry is expected to spend about Bt250 million as a guarantee and entry fee to the futures market for the total of 500,000 tonnes. The sale of 150,000 tonnes would need a budget of Bt80 million, which includes entry fees, commissions, taxes and other expenses.
Sakda Thongpalad, senior vice president for business at the Afet, said the futures market would be an efficient channel to help reduce the government’s holdings.
Many traders should join the bidding because the market is fair and transparent. Not only large traders, but also small and medium-sized ones could participate.
From 2007 to 2009, the Afet succeeded in helping to unload more than 2 million tonnes of rice from the government’s stocks.
Next month’s round is expected to generate about 500-600 contracts.
