Thailand looks to intergovernmental deals to boost rice exports

The Thai government plans to boost rice exports by negotiating sales directly with other governments in a move intended to help struggling farmers ahead of a general election to be held by February next year.
In order to accelerate negotiations, officials will be sent to major importers of Thai rice, said Adul Chotinisakorn, director general of the Commerce Ministry's Department of Foreign Trade.
"In some countries in Asia, rice importing issues are completely controlled by government procurement bodies," Adul said. "We aim to visit them and inform them that the Thai government is ready to assist Thai private exporters in selling more rice and the government can also sell rice via the government channel."
Several Southeast Asian importers will be targeted, including the Indonesian government's procurement and logistics agency Bulog, the Philippines' National Food Authority and Malaysia's commodities procurement agency Bernas.
According to ministry statistics, Indonesia and Malaysia import around 800,000 tons of Thai rice per year, while the Philippines imports 1 million tons.
The government also hopes to engage traditional importers in the Middle East such as Iraq and Iran, each of which currently imports about 1 million tons of Thai rice annually.
Meanwhile, the Philippine government is due to hold a tender in March for the purchase of 250,000 tons of rice from the private sector, for which Thai companies are expected to bid.
The Thai government does not intend to compete with the companies, but "would help facilitate Thai exporters to join the bidding," Adul said.
In recent years, Thailand has been keen to export rice on a government-to-government basis, particularly to countries where the payment and delivery processes can be complicated.
Government-to-government deals have been used to boost rice exports and absorb excessive supply. © Getty Images
Selling rice via government channels helps mitigate risks that private exporters often find too much to bear, such as navigating economic sanctions imposed by the international community. Doing business with Iranian companies, for example, has historically been difficult as banks have been unable to process payments.

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