» Business

Thailand to sell rice below cost in secret deals, says source

Publication Date : 31-10-2012


The Thai Commerce Ministry is secretly arranging to sell the government's rice to local traders at below cost, aiming to clear up its overwhelming stockpiles rapidly in preparation for upcoming rice production under the pledging project.

A rice-trader source said yesterday that a huge loss would be incurred if the transaction went through as the pledging cost of jasmine rice is above 32,000-33,000 baht (US$1,040 to $1,070) to per tonne, but the government is expected to sell it at 29,000 baht a tonne.

The source said his company held secret talks with the ministry in the middle of the month. The ministry had invited traders to make offers for the government's stocks.

The government has offered to sell about 500,000 tonnes of jasmine rice.

The source said the discussion had not been recorded in writing by the ministry. Some exporters have offered to buy jasmine rice at 28,300-28,500 baht a tonne. Prices like that would result in huge losses for the government, since they are much lower than the cost of the rice.

The source raised concern that this kind of secret dealing could lead to corruption and lack of transparency. It would also cause the market price of jasmine rice to drop, despite high demand caused by drought.

The government should open bidding to the public to show its transparency, the rice trader urged.

Meanwhile, Tikhumporn Natvaratat, deputy director-general of the Foreign Trade Department, said the Commerce Ministry planned to open bidding for some rice in the stockpiles soon.

He said the ministry was drafting conditions for releasing rice from the stocks to ensure the release did not have an impact on the market prices of rice.

*US$1=30.7 baht


Mobile Apps Newsletters ANN on You Tube