Thailand-China Rice Deal Takes Root

[webfact]

China rice deal takes root

Supalak Ganjanakhundee

The Nation

His Majesty the King grants an audience to Chinese Premier Wen Jiabao, left, Wednesday evening at Siriraj Hospital.

BANGKOK: -- Yingluck govt gets some respite as Chinese private sector buys 260,000 tonnes, valued at Bt6.24 billion; MoU signed to boost rice trading; three other pacts signed during Chinese Premier Wen Jiabao's visit

A rice deal signed during Chinese Prime Minister Wen Jiabao's official visit has already taken effect with the Chinese private sector buying hundreds of thousands of tonnes of rice worth some Bt6.24 billion from Thailand, helping relieve the domestic political and market pressure on the government.

Prime Minister Yingluck Shinawatra and Premier Wen yesterday witnessed the signing of a memorandum of understanding on the rice deal, which would facilitate rice trade between the two countries.

The MoU was not a government-to-government contract as widely understood, but an inter-government instrument to boost rice trade, a senior official said. Yesterday's purchases of rice totalled 260,000 tonnes of polished rice seeds.

The MoU says both sides will develop rice trading for the benefit of good relations and mutual benefit. Both parties will cooperate on the basis of transparency, justice and fairness between their rice-trading agencies.

The two governments will support proper management of rice trading in accordance with market principles, according to the government document released after yesterday's Cabinet meeting.

Under the MoU, the Chinese government will support the Chinese private sector's rice trading with Thailand, according to the Foreign Ministry's East Asia Department director-general Damrong Kraikruan.

The rice deal with China was the most watched agenda item during Premier Wen's visit, as the government was under political pressure after accusations from the Opposition and academics that its rice price-pledging policy had damaged the domestic market and had caused a decline in Thai rice trading.

The Opposition Democrat Party plans a censure motion debate in the House of Representatives next week against the government on the rice-policy issue.

However the rice deal was just part of the discussions during the visit of Premier Wen. The two leaders also witnessed the signing of three more pacts on cooperation between the foreign ministries of the two nations - on the transfer of prisoners and education cooperation.

The two leaders also considered cooperation on many other farm products, including tapioca, rubber and fruit, Yingluck said.

Thailand wanted to increase Chinese investment by 15 per cent annually, she said, adding that the various sectors open for Chinese investors included rubber processing, natural plastic, automobile production, infrastructure development for connectivity, the Dawei Special Economic Zone in Myanmar, a high-speed train, water management and flood prevention.

Premier Wen said China would support and cooperate with Thailand in accordance with the five- year plan of economic cooperation, which was signed recently.

The two countries will forge cooperation on infrastructure development, agriculture, investment and Mekong development schemes, he said.

"Development in Thailand not only brings benefits to the Thai people, but it would be a good condition for relations between Thailand and China," he said. "It is China's pleasure to cooperate with Thailand to help each other coordinate on regional affairs, notably to promote relations between China and Asean, for peace and prosperity in the region."

Wen also praised Yingluck's policy of giving importance to cultural and education cooperation. The two leaders jointly presided over an official opening of the Chinese Cultural Centre in Bangkok. Yingluck said Thailand would also open a Thai Cultural Centre in China soon.

Yingluck hosted an official lunch for Wen after their meeting at Government House. The Chinese premier later made a courtesy call on Privy Council President Prem Tinsulanonda.

His Majesty the King granted him a Royal audience at Siriraj Hospital before his departure for Beijing.

Wen will step down from office soon after the new set of leaders chosen by the Communist Party Congress take the reins. Yingluck conveyed her regards to the new Chinese leadership led by Xi Jinping and praised outgoing Wen as well as President Hu Jintao for their ability to bring economic success to China and the region.

Memorandum of understanding on rice

- Both sides will develop rice trading for the benefit of good relations and mutual benefit.

- Both parties will cooperate on the basis of transparency, justice and fairness between their rice-trading agencies.

- The two governments will support the proper management of rice trading in accordance with market principles.

- The MoU can be amended or revoked with consent of contracting parties.

-- The Nation 2012-11- 22

[webfact]

Three firms ink Bt6.24-bn deals; shipments start next year

Petchanet Pratruangkrai,

Achara Pongvutitham,

Piyanart Srivalo

The Nation

BANGKOK: -- China's state owned Cofco, the country's largest grain trader, has inked agreements with three Thai rice exporters with a combined volume of 260,000 tonnes, worth Bt6.24 billion - the figure announced by the government - to start shipping next year, the Thai government said yesterday.

The Thai exporters include Asia Golden Rice, accounting for 120,000 tonnes, Thai Fah (2511) (100,000 tonnes) and CP Group (40,000 tonnes). Export prices will be negotiated later depending on prevailing market figures.

The agreement was signed separately from yesterday's memorandum of understanding (MoU) on rice between China and Thailand.

A source from the Thai Rice Exporters Association said deals had been inked with a total of seven Chinese importers including Cofco. Under the agreement, China wants to purchase jasmine rice, sticky rice and white rice.

"The export deal should come up with fair prices for the two countries [which will] be [settled on] later. This contract is drawn up to encourage rice cooperation between the two countries," said the same source.

Prime Minister Wen Jiabao of China also witnessed the agreements' signing ceremony held at the Thai-Chinese Chamber of Commerce yesterday during the Chinese premier's official two-day visit to Thailand. Wen also witnessed the MoU on rice between Chinese Commerce Minister Chen Deming and Thai Commerce Minis-ter Boonsong Teriyapirom, signed at Government House yesterday.

However, China doesn't want to finalise the total import volume and period of the MoU now, saying it would force an obligation on Beijing which also imports rice from Vietnam, Pakistan and India.

Another source from the association said China did not want to promise any immediate figure with Thailand that might jeopardise the government's current import deals.

Tikhumporn Natvaratat, deputy director-general of the Foreign Trade Department, said Thailand is trying to export as much as it can. China's rice import volume averages 1.5 million-2 million tonnes per year, mainly from Vietnam and Thailand. Beijing has already imported 2.6 million tonnes of rice so far. Thailand last year exported to China 320,000 tonnes of rice, mainly jasmine rice.

"The MoU is designed to show that China is willing to import Thai rice and also to signify the relationship between the two countries," said Tikhumporn, adding that the average export price (under the MoU) is US$800 (Bt24,565) per tonne. Previously, the MoU committed China to purchase 5 million tonnes of rice from Thailand within three years.

The department is planning to send a rice trade mission to China in the near future to negotiate in detail the first-lot imports.

Previously, Thailand and China had separately inked government-to-government deals to sell 2 million tonnes of Thai rice to China, without any certain export period.

The government has said Thailand's total rice export under government-to-government deals will reach 1.7-1.8 million tonnes, worth Bt70 billion this year, to Indonesia, Bangladesh and China.

As of November 19, Thailand's total rice export volume reached 6.17 million tonnes, a significant drop of 35 per cent, while export value achieved $4.2 billion, down by 23 per cent. Thailand is the third biggest rice-exporter after Vietnam and India. It is expected the Kingdom's exports will reach 7.3 million tonnes this year.

Thailand will form a rice cooperative with Indonesia, Malaysia, Singapore and Brunei to secure rice supplies to them.

-- The Nation 2012-11- 22

[Ragzilb]

This have always been the plan with the Rice Scheme, but the real question is who is benefitting from it. ?? og what are their agenda. ??

Hope for all this will turn out the right way

[Ricardo]

Are the Chinese really willing to pay B26,000 per-ton, for ageing Thai rice to be delivered next year, isn't that way-above current global prices ?

[cloudhopper]

Are the Chinese really willing to pay B26,000 per-ton, for ageing Thai rice to be delivered next year, isn't that way-above current global prices ?

" Export prices will be negotiated later depending on prevailing market figures."

[Pimay1]

Are the Chinese really willing to pay B26,000 per-ton, for ageing Thai rice to be delivered next year, isn't that way-above current global prices ?

Yes it is. That is about USD 860.00 at the current exchange rate. Below is the previous six month global prices.

"Label","US Dollars per Metric Ton"

"Apr-2012","585.95"

"May-2012","612.43"

"Jun-2012","606.14"

"Jul-2012","578.36"

"Aug-2012","582.87"

"Sep-2012","590.5"

"Oct-2012","584.74"

[hellodolly]

Are the Chinese really willing to pay B26,000 per-ton, for ageing Thai rice to be delivered next year, isn't that way-above current global prices ?

Had to laugh at

"The two governments will support proper management of rice trading in accordance with market principles, according to the government document released after yesterday's Cabinet meeting."

What market principal says you pay the highest price you can for a commodity.

How ever the Chinese government is going to subsidize the buyers with Chinese tax payers money. What is Thailand giving them in return out of Thai tax payers money?

[Pimay1]

Are the Chinese really willing to pay B26,000 per-ton, for ageing Thai rice to be delivered next year, isn't that way-above current global prices ?

Yes it is. That is about USD 860.00 at the current exchange rate. Below is the previous six month global prices.

"Label","US Dollars per Metric Ton"

"Apr-2012","585.95"

"May-2012","612.43"

"Jun-2012","606.14"

"Jul-2012","578.36"

"Aug-2012","582.87"

"Sep-2012","590.5"

"Oct-2012","584.74"

Ok So I never learned to count. The previous seven months. Just remember I also went to a university in Kentucky like someone else we know..

[GentlemanJim]

However, China doesn't want to finalise the total import volume and period of the MoU now, saying it would force an obligation on Beijing which also imports rice from Vietnam, Pakistan and India.

So really the entire agreement is not worth the rice paper it's written on! All just a show as something to achieve on an official visit. I can't remember when an MOU has any legal implications anyway. Perhaps instead of getting an MOU Yingluck should have got an IOU.

[hellodolly]

However, China doesn't want to finalise the total import volume and period of the MoU now, saying it would force an obligation on Beijing which also imports rice from Vietnam, Pakistan and India.

So really the entire agreement is not worth the rice paper it's written on! All just a show as something to achieve on an official visit. I can't remember when an MOU has any legal implications anyway. Perhaps instead of getting an MOU Yingluck should have got an IOU.

Didn't Thailand have some sort of MoU with Cambodia so there would be no war?

[Thaddeus]

I wouldn't be entirely surprised if this deal turned out to be Buy One, Get One Free.

[GazR]

Of course what they also have in common is their preference for running one-party states if not the ultimate goal of 'true communism'.

Now let's see if they can actually accomplish something difficult, rather than merely picking or plundering low-hanging fruit, like constructing a modern rail freight link between the two countries.

Or as English is/will shortly be the official language of ASEAN, have the foresight to ignore the public servants this time and make English the official second language of Thailand - instead of having an Education Minister who thinks it's a no brainer one week, then a week later announces it's a really bad idea. You don't have to be Einstein to understand the difference having bilingual signage everywhere would make, you just have to not be Thaksin Shinawatra.

[GazR]

I wouldn't be entirely surprised if this deal turned out to be Buy One, Get One Free.

And I thought the going rate was 'Two for me and one for you'. They don't call him 'Mr. 30%' for nothing...

[MaxLee]

Many many years ago, when treacherous ethnic Chinese people immigrated to Thailand and became Thai-Chinese of mostly royal clan status, they have manifested the same system that is haunting and mentally destroying the minds of millions of Thai people nationwide until today... A top to bottom corruption polluted system in which the rich and powerful dominates their power as they want in whatever way, even getting away with murder.

[Buchholz]

has inked agreements with three Thai rice exporters with a combined volume of 260,000 tonnes

Cause for celebration...

1. Only 9,740,000 more tons still left to sell

2. China has agreed to import more rice than the heavily-populated Ivory Coast.

Disastrous intervention puts Thai rice exporters in peril

Not all that money will be lost but the International Monetary Fund estimated in June the [rice pledging] programme could cost about 1 percent of GDP annually, even before storage and management costs. That is about $3.8 billion a year.

Even that assumes the government can find buyers for the record 10 million tonnes of milled rice it has stockpiled.

It sold 240,000 tonnes to Ivory Coast in July but in general buyers have gone elsewhere

Reuters

http://thestar.com.m...ec=Worldupdates

.

Edited November 22, 2012 by Buchholz

[rogerdee123]

I think it's more of an arrangement like ......

"We will buy your overpriced rice if you will accept our overpriced bid for the high-speed train"

[Moruya]

I think it's more of an arrangement like ......

"We will buy your overpriced rice if you will accept our overpriced bid for the high-speed train"

Hit the nail on the head!

[Baerboxer]

I think it's more of an arrangement like ......

"We will buy your overpriced rice if you will accept our overpriced bid for the high-speed train"

Hit the nail on the head!

And a few 'sweetners" for all those involved.

[spirit47]

Are the Chinese really willing to pay B26,000 per-ton, for ageing Thai rice to be delivered next year, isn't that way-above current global prices ?

" Export prices will be negotiated later depending on prevailing market figures."

That means, the Chinese pay the global prices when delivery.