Commerce won’t accept low prices for rice stocks

02.08.2016

THE COMMERCE Ministry is keen on clearing out all its rice stocks by the first half of next year, but not at cut-throat prices.

"If traders' offers are too low, the government will not sell the rice," Duangporn Rodphaya, director-general of the ministry's Foreign Trade Department, said yesterday.

"We acknowledge that we want to clean out our inventory, as it creates a high financial burden, but it does not mean that traders can offer very low prices.

"The government is still concerned about the market price and impact on the market. If we sell rice too cheaply, it will affect the market price," she said.

The government has approved the sale of only 45,000 tonnes of rice to four traders and enterprises out of the 1.63 million tonnes that attracted offers at the latest round of bidding. The recent decision by the government to sell rice in small amounts gives a clear signal that traders should not offer too low a price.

Although it was able to sell a small amount of rice at the latest auction, the government will open bidding for more rice this month. However, it will consider the price offers too low, it will not approve the sale.

Because of the drought and the government's plan to restrict rice-growing areas, the supply of rice is low, so Thailand could maintain carryover stocks of about 5 million tonnes.

If all bids are approved, about 9.1 million tonnes of rice will remain in the granaries.

The current military-installed regime has succeeded in unloading 8.57 million tonnes of rice during the past two years. Thailand targets exports of 9.5 million tonnes of rice this year.

As of last Tuesday, it had exported 5.5 million tonnes worth Bt86.6 billion so far this year, an increase of 8.5 per cent in volume and 5.8 per cent in value from the same period in 2015.


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