Thailand to Sell Rice, Price is Stumbling Block
Aug 21, 2012 05:26 AM EDT | By Sharon Robinson
Thailand will be selling 753,000 tons of rice from its vast stockpile next week, reports Reuters. The move will be an effort to make space for more rice in the October season.
Thailand has been building up a vast rice stock in the hope that it can export when all the other exporters have exhausted their surplus stocks. The stockpile is the result of a rice-pledging scheme by the government, in which the government buys rice from farmers above the market price. The program was introduced to help farmers get a better price for their rice stocks. Currently, the Thai government is paying farmers 15,000 baht ($470 U.S.), whereas the market price is 9,000 baht ($285 U.S.).
Thailand has nearly 10 million tons of milled rice in its yards. However, the price of Thai rice is higher than Indian and Vietnamese rice. Many rice importers have been looking to India and Vietnam to meet their rice demands. Thailand is slowly losing its position as the top-exporter.
It seems Thailand still has faithful buyers and Commerce Minister Boonsong Teriyapirom claims that the country has sold 2 million tons of rice to China, while another million will be sold to Indonesia, reports Reuters.
The report adds that Vietnam too is looking to sell at least 500,000 tons of rice to Indonesia at a lower price. Chances are that Indonesia may opt for Vietnam rice.
Traders have been complaining that the government does not seem to have sold any rice at all. High prices have also been a source of their anger. According to a report in Bloomberg the price of Thai 5 percent white rice is likely to drop by December, thereby increasing sales. Rough rice futures are currently going for $15.55 per pound at the Chicago Board of Trade.