Rice mountain growing in Thailand

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thai-rice-warehouseThailand as of late has been desperately trying to reduce its piling rice mountain by selling off stockpiles in international tenders, but the results so far were disappointing.

In July tenders, the Thai government accepted bids for 120,000 tonnes of unmilled rice and 90,000 tonnes of milled rice from its stockpiles, well below the month’s target of 1 million the government aimed to sell to make way for new grain.

Besides the tenders, Thailand this year so far sold 250,000 tonnes of rice stocks to Iran in a government-to-government deal at undisclosed prices, and to Benin (330,000 tonnes), the US (180,000 tonnes), Japan (170,000 tonnes) and Cote d’Ivoire (150,000 tonnes).

On August 20, the government tendered to sell 110,000 tonnes of white rice, but received only bids for 30,000 tonnes of rice.

Traders said the government is making huge losses even if it sold the rice at market prices, which are far below what it paid farmers at 15,000 baht per tonne of paddy plus milling and storage costs that would amount to around $700 per tonne. But market prices for premium rice are just around $570 and falling. Exporters say bids for large tenders would range from around $390 to $470 per tonne.

Thai rice stockpiles are currently at a record 17 to 18 million tonnes. The government spent around $19.3 billion for it since its controversial rice subsidy scheme started in October 2011.

Thailand’s rice exports in the first two quarters dropped by 8.4 per cent and the prospects in the second half of the year remain bleak, said Chookiat Opaswong, honorary chairman of the Thai Rice Exporters Association. He expects Thailand’s rank in the global export market to remain 3rd, with an export volume of just 7 million tonnes this year, lower than India’s at 9 million tonnes and Vietnam’s at 7.4 million tonnes.

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Reading Time: 1 minute

Thailand as of late has been desperately trying to reduce its piling rice mountain by selling off stockpiles in international tenders, but the results so far were disappointing.

Reading Time: 1 minute

thai-rice-warehouseThailand as of late has been desperately trying to reduce its piling rice mountain by selling off stockpiles in international tenders, but the results so far were disappointing.

In July tenders, the Thai government accepted bids for 120,000 tonnes of unmilled rice and 90,000 tonnes of milled rice from its stockpiles, well below the month’s target of 1 million the government aimed to sell to make way for new grain.

Besides the tenders, Thailand this year so far sold 250,000 tonnes of rice stocks to Iran in a government-to-government deal at undisclosed prices, and to Benin (330,000 tonnes), the US (180,000 tonnes), Japan (170,000 tonnes) and Cote d’Ivoire (150,000 tonnes).

On August 20, the government tendered to sell 110,000 tonnes of white rice, but received only bids for 30,000 tonnes of rice.

Traders said the government is making huge losses even if it sold the rice at market prices, which are far below what it paid farmers at 15,000 baht per tonne of paddy plus milling and storage costs that would amount to around $700 per tonne. But market prices for premium rice are just around $570 and falling. Exporters say bids for large tenders would range from around $390 to $470 per tonne.

Thai rice stockpiles are currently at a record 17 to 18 million tonnes. The government spent around $19.3 billion for it since its controversial rice subsidy scheme started in October 2011.

Thailand’s rice exports in the first two quarters dropped by 8.4 per cent and the prospects in the second half of the year remain bleak, said Chookiat Opaswong, honorary chairman of the Thai Rice Exporters Association. He expects Thailand’s rank in the global export market to remain 3rd, with an export volume of just 7 million tonnes this year, lower than India’s at 9 million tonnes and Vietnam’s at 7.4 million tonnes.

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