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Thai ministry accused of secret rice sale

Publication Date : 25-07-2012

 

Thailand's Commerce Ministry has secretly sold 3 million tonnes of the government's rice, with Siam Indiga, which is close to the government, taking a big lot, according to rice-trading sources.

The traders claim that the current government has created huge losses for the country as the stocks are sold at far below cost and that the Foreign Trade Department has allowed only a few companies to buy rice from the government at a very special price.

However, Commerce Minister Boonsong Teriyaphirom yesterday denied that rice was released from government stocks, saying the ministry had only disposed of rice under government-to-government contracts and sold some broken milled rice.

The ministry has never allowed any officials to contact rice exporters to sell rice from state inventories, he said. If any did, they would be an unlawful gang.

The ministry is now checking rice stocks so that it will know exactly how much to offer under G2G deals to be made soon, Boonsong said.

A source said the government of Prime Minister Yingluck Shinawatra had released almost 3 million tonnes in the first half of this year, of which 1.9 million tonnes were old supplies carried over from the previous government. The rest was from the recent harvest season under the Yingluck government's rice-pledging scheme.

However, the government and buyers have not indicated the prices, as they are below the current market price of US$610 per tonne. The government's price is predicted at $100 per tonne below market. It is also much lower than the pledging cost, which has been quoted at more than $700 a tonne.

The source said Siam Indiga had been allocated the biggest slice of up to 2 million tonnes. The company then arranged contracts with rice millers and exporters to buy its rice and profited from the difference between its low cost and the market price.

New-crop rice has also been released to giant exporters, whose major markets are Iran and Iraq. The price was also undisclosed, but was expected to be very low. The Foreign Trade Department had to purchase the rice on behalf of the rice company from the Public Warehouse Organisation. This way, the company's name will not appear on the invoice and it will be hard to investigate.

Siam Indiga is also responsible for distributing government rice to other exporters under the G2G project.

The source said ousted prime minister Thaksin Shinawatra had told Indonesian and Malaysian importers that if they would like to purchase rice from the Thai government's stocks, they should contact Siam Indiga.

Siam Indiga is known as the new marketing arm of bankrupt President Agri Trading, the country's biggest rice exporter during the Thaksin administration, when Wattana Muangsook was commerce minister.

The top executive of President Agri Trading, Apichart Jansakulporn, has close relations with the ousted prime minister.

Sompong Kitireanglarp, president of Ponglarb, one of the leading exporters, said he was contacted by an official from the Commerce Ministry who offered to sell government rice.

However, Sompong said he refused as did not want to get involved in shady deals.

The official told Sompong said that if his company was interested in buying rice from the government's stocks, the firm could specify which rice stocks the firm preferred and then the firm could negotiate the price later.

Ponglarb directly contacted the ministry to buy 20,000 tonnes, but was turned down.

 

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