Thai govt expects more rice deals with China in 2014

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Govt expects more rice deals with China in 2014
PETCHANET PRATRUANGKRAI
THE NATION



BANGKOK: -- THE COMMERCE MINISTRY expects to sell more rice to China and other countries next year after clinching a contract to supply about 3 million tonnes to China this year.

"The government should be able to release more rice from stockpiles next year. Now less than 7 million tonnes remains in warehouses from a total of 10 million tonnes," Commerce Minister Niwatthumrong Boonsongpaisan said yesterday.

The ministry's Foreign Trade Department signed a government-to-government contract with Chinese state-owned Beijing Great Northern Wilderness Rice Industry, a subsidiary of Heilongjiang province's Beidahuang, to supply 1.2 million tonnes of 5-per-cent white rice over two years and 90,000 tonnes of tapioca to China.

Niwatthumrong said the government was negotiating more rice contracts with China and other countries.

The ministry did not disclose the value of the contract with China, saying the price was in line with the market price and should not create a huge loss for the government.

China will choose its own rice quality improving and shipping company under an ex-warehouse contract, which excludes shipping costs. About 50,000 tonnes of rice will be shipped to that country each quarter. For this year, about 15,000 tonnes will be exported to China.

This is the third contract with China this year. The first was signed by the Thai Rice Exporters Association and China's state-owned Cofco (China National Cereals, Oils and Foodstuffs Corporation) for 1 million tonnes over five years. The next contract was a G2G deal between the Foreign Trade Department and Cofco, also for 1 million tonnes over five years.

Niwatthumrong said China had high demand for foreign rice and other agricultural products as it wanted to supply both its domestic market and allied countries.

The ministry is scheduled to sell 131,849 tonnes on the Agricultural Futures Exchange of Thailand on Monday. This will include 114,000 tonnes of 5-per-cent white rice and 17,000 tonnes of 100-per-cent jasmine rice.

Deputy Commerce Minister Yanyong Phuangrach said the government would gradually release rice to |the futures market and to general bidding, as global demand was expected to rise after natural disasters in many countries.


-- The Nation 2013-11-21

[waza]

"BANGKOK: -- THE COMMERCE MINISTRY expects to sell more rice to China and other countries next year after clinching a contract to supply about 3 million tonnes to China this year."

More good news from the Yingluck government, or is it?

"The ministry did not disclose the value of the contract with China, saying the price was in line with the market price and should not create a huge loss for the government.....Niwatthumrong said China had high demand for foreign rice and other agricultural products as it wanted to supply both its domestic market and allied countries."

This statement certainly indicates that China is getting the rice at a good price and lower than market price because why else would these allied countries go through China rather than buying direct from Thailand?

"Then there are the stories flying around that the Commerce Ministry has been selling rice stocks at even lower prices to certain groups of traders. This has fuelled speculation that the government's bottom line in this case could be even worse, as much as 30 per cent lower than the already low level of revenue.....Is that why we taxpayers haven't been shown the real "income statement" and "profit-and-loss accounts" of this scheme that has been the subject of heated debate? Is this why all the talk about government-to-government deals and memoranda of understanding with this and that government has not been substantiated with transparent disclosure of details pertaining to the supposed contracts?"

Yes it certainly appears that way.

[Ricardo]

Funny thing, IIRC the government were promising last year, massive new contracts with China for delivery by the end of this year.

Now it's all going to happen next year, although the numbers still don't add-up, the contracts still aren't signed (MOUs mean nothing really), and no details of prices are ever revealed ?

Always cake tomorrow with this rice-scheme, but never today, isn't it ?

And substituting rice-shipments instead of cash-payment, for contracts under the infrastructure scams schemes, will leave ample room for further fudging of the numbers, for the next several years !

[edwinchester]

I keep reading the OP but the figures given do not add up to anywhere near three millions tonnes and if sold at market price the govt will be taking a big hit.

[NongKhaiKid]

More rice to China, more ' quality ' Chinese tourists,, more quality BS

[worgeordie]

The only way the stock piles are going to go down is

if the rats ,weevils and birds start eating more !

regards Worgeordie

[ChrisY1]

Same old BS.....!!

[Local Drunk]

I expect to win the Lotto in 2014...

[laurentbkk]

expectation doesn't mean closing the deals .. thats a huge difference

[ggold]

The ministry did not disclose the value of the contract with China, saying the price was in line with the market price and should not create a huge loss for the government.

So they did sell it at a loss then.

[Jack007]

I expect that the rice will be sold as "barter"trade. goods against goods.

So Thailand delivers rice 10 million ton against a calculationprice of 12us$ and
China will deliver High Speed Trains (which raised in price with 30% last week).

So Thailand gives low value products against China's high valued products.
China get his rice against 8,5 us$ (12 -/- 30%)and Thailand have to put more money in his rice pledging system.

Who do you think will be the winner. I love Asean business organisation.

If Thailand not cooperate China will purchase in Viernam or Cambodia,

But that is only what i expect.

[slapout]

These are two, 5 years and one 2 year, agreements with the purchaser (China) taking directly from storage, a quality of rice that they deem satisfactory. Total of 3.2 million tons with 15,000 tons going this year.

The Commerce minister even goes so far as to say the 10+ million tons in Thai storage will be decreased by the 3 agreements to 7 million tons The fancy description of a pig in a poke cannot change the fact its still a pig and the maintance cost keep increasing while the value keeps declining as long as its in house.

[tim armstrong]

If the price was good, for sure the government would tell everyone. It's all going to get worse before it gets better. I wonder if Yingluk will be having a 'prearranged' overseas tour soon - to get advice on what to do ?

[Thait Spot]

Allied Countries? North Korea?

Not a huge loss - but a large one?

I reckon the cost to the Chinese will be around 300 bucks per ton

So a million tons is 9 billion baht

Meaning 10 million tons will return 90 billion credit against the 600 billion overdraft

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

[jaiyen]

Wait till the Chinese people taste the inferior out of date rice. Then we will see if they will buy more next year.

[slapout]

Wait till the Chinese people taste the inferior out of date rice. Then we will see if they will buy more next year.

The terms of the purchase, for the rice inspection and shipping from its storage site by the purchaser (China) is not so discrete Chinese way if insult, Thailand without Commerce even realizing they had been insulted. In all likelyhood China will end up with new crop rice from the get go of the deal. Thats their whole point on quality inspection on site and then shipment by their own people.

The Commerce/Finance novices are again displaying their incompentance in international trade, barter, and business. But who would blame Chinese suspision of Thai rice when there have been several reports made public, of rice shipments being poor quality, offensive smell, traces of undesirable chemicals thus returned, or not acceptabld or paid for..

The terms of payment are probably another paper boondoggle, and its doubtful that it will be revieled by this bunch of self serving political hacks.