Thailand has signed contracts to sell 7.3 million tonnes of rice from its stocks to foreign governments and shipments would run from now until late next year, the commerce minister said on Wednesday. Private exporters were, however, sceptical whether the deals would go through as the minister has made similar comments in recent weeks about big government-to-government deals but none has been confirmed.
Memorandums of understanding (MOUs) can be signed but they do not necessarily imply any commitment to buy. "They are all contracts committed to by other governments, not just MOUs," Boonsong Teriyapirom told reporters, adding that rice exports could reach 8.5 million tonnes this year.
Boonsong said the government had also sold rice from stocks to private exporters. It recently offered 753,000 tonnes to exporters but sold only a third. After these sales, government rice stocks would drop sharply to 4.17 million tonnes from the record high levels, the minister said without giving any details on the estimate. Rice stocks have soared in Thailand as an intervention policy to pay farmers higher-than-market prices has funnelled a huge quantity of supply into government warehouses. The intervention has pushed Thai rice prices to uncompetitively high levels compared to grain from Vietnam, India and elsewhere, and Thai shipments have plunged.
"It's hard to believe the government has sold these big lots of rice at a time when demand is thin and most buyers are well-stocked," said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association. The minister said around 2 million tonnes had been sold to Indonesia and the same amount to both the Philippines and China.
Some traders said they did not think Thailand would have sold that amount to Indonesia, especially as Jakarta has just taken an option to buy from Vietnam. Vietnam gave Indonesia the option in August of buying up to 500,000 tonnes of rice if needed, probably after September.
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