Beijing embassy confirms rice deal

The government yesterday insisted it had secured a rice sale to China, with a Thai official in Beijing confirming the 1.2-million-tonne contract, which is part of Thailand’s plan to export 4 million-5 million tonnes of rice to that country this year.

While Commerce Minister Niwattumrong Boonsongpaisan flatly dismissed the Democrat Party’s speculation that his ministry is faking the rice deal with China, Phaichit Viboontanasarn, the commercial attache at the Thai Embassy in Beijing, confirmed the deal with a Chinese state enterprise, saying the price is close to the Bt15,000-per-tonne pledging price but lower than US$600 (about Bt19,020). 

Under the memorandum of understanding signed recently, the rice would be transported to the city of Harbin in three shipments. 

“In 2013, we target to export 4-5 million tonnes of rice to China, where demand is high after floods and crop losses,” Phaichit said. “The government has instructed all units to speed up the sale of rice and other products to China. Deals with major cities like Shanghai, Zhejiang, Hangzhou and Shandong should be wrapped up soon.”

Niwattumrong has come under attack from Democrat MPs who, referring to a report by Reuters, cast doubt on the existence of the deal. The minister revealed the deal on September 8 after his return from China. In an article by Reuters dated September 12, industry sources were quoted as doubting that China would want that much rice.

Phaichit said this sale is on top of the government-to-government deal for 1.2 million tonnes signed during Prime Minister Yingluck Shinawatra’s visit to Nanning, where she met Chinese Prime Minister Li Keqiang. The first shipment of 300,000 tonnes is scheduled before the end of this year. 

This would help Thailand reduce its rice stocks from over 10 million tonnes at present, which should push up global rice prices, he said.

Niwattumrong said that while in Harbin he discussed the deal with Beidahuang Group – a Chinese state enterprise. In two weeks, the contract will be signed, either in Thailand or China. 

“The price is good,” he said. “I don’t know who Reuters talked to. I was involved in the negotiations and I don’t need to lie.”

Niwattumrong has said Thailand would start delivering rice to Iran in October, and Iraqi representatives will come to Thailand soon for talks. 

The deal has raised suspicions given the low volume of Thai rice exports to China in the past few years. In 2009, Thailand shipped only 328,238 tonnes to China. From 2010 through 2012, the volume was 264,207; 267,846; and 143,082 tonnes. 

The Commerce Ministry has claimed that it has successfully raised Bt150 billion from selling rice stocks and is confident that the figure would hit Bt200 billion at the end of this year. The ministry is now under fire, pressured to speed up the rice releases as a Finance Ministry committee is about to conclude the exact cost of the rice-pledging scheme this week.

Appearing upset with the move, Deputy Commerce Minister Yanyong Phuangrach said the Finance Ministry committee’s task is to follow the money trail of the scheme, not to inspect the scheme. He said it is the government’s job to plug the project’s loopholes.

Besides the anticipated huge loss, the pledging scheme is also implicated in a corruption case. Vicha Mahakhun, a member of the National Anti-Corruption Commission, said the agency has now inspected half of the documents used to substantiate allegations that some companies are benefiting from the scheme.