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June 2024

Government to try new strategy with rice deals

Indonesia is the largest market for Thai rice exports. (Photo: Chakrapan Natanri)

The Commerce Ministry is scheduled to negotiate on Thursday the sale of 1 million tonnes of rice to Indonesia under government-to-government (G2G) deals, while pledging to move ahead with plans to negotiate a similar rice sale with China.

According to Commerce Minister Phumtham Wechayachai, the Foreign Trade Department’s chief was tasked with leading a team to negotiate the expansion of rice trade through G2G agreements with Indonesia following approval by the National Rice Policy Committee.

Late last year, Prime Minister Srettha Thavisin said on the sidelines of the Japan-Asean summit that Indonesia expressed the intention to purchase 2 million tonnes of rice from Thailand, consisting of 1 million tonnes via G2G deals and 1 million through private negotiations.

“We are worried people will cling to old perceptions. We don’t want this to be seen as the old G2G format, but rather the government is taking the lead while the private sector follows,” said Mr Phumtham

“In this new paradigm, the government will no longer sell rice directly to potential buyers at a low price. Instead, it will function as the guarantor ensuring if G2G deals are adopted, delivery is guaranteed. The government will handle negotiations, while the private sector provides support”

In addition to the deal with Indonesia, he said the ministry is awaiting the outcome next week of the extended G2G rice delivery period for an additional 280,000 tonnes with Cofco Corporation, a Chinese state-owned organisation involved in the production and import of agricultural products.

In related news, a delegation is scheduled to negotiate expanding the rice market in the US, slated for Los Angeles from jan 17-22 Mr Phumtham said there are also plans to negotiate with several other regions, including Saudi Arabia, Africa and Iran.

According to data from the Customs Department, for the first 11 months of 2023 Thailand exported 7.95 million tonnes of rice valued at 160 billion baht (US$4.61 billion), marking a 14.7% increase in volume and a 28.9% uptick in value year-on-year,

Of the total rice exports, white rice accounted for 4.47 million tonnes, up by 31% for the period, with parboiled rice tallying 1.32 million tonnes, down by 0.9%, Thai hom mali fragrant rice 1,44 million tonnes, up 0.6%, Thai fragrant rice increasing by 9.3% to 474,806 tonnes, and glutinous rice decreasing by 25% to 227,012 tonnes

In terms of markets, Indonesia imported the most at 1.27 million tonnes, a surge of 2,145%, followed by Africa at 876,184 tonnes, up 26.6%, Iraq 814,805 tonnes, a gain of 44.2%, the US 648,946 tonnes, rising 8.9%, and China 367,204 tonnes, down by 44%

The Thai Rice Exporters Association forecasts Thailand to ship 75 million tonnes this year as India may reverse course and end its export ban in the second half. Last year, rice exports likely totalled 8.8-8.9 million tonnes, surpassing the outlook of 8.5 million tonnes, valued at 180 billion baht as prices rose, said the association. QR Code

Published Date: January 17, 2024

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