More than 50,000 tonnes of Thai rice sold to private firms

[BANGKOK] The Thai government has approved the sale of more than 50,000 tonnes of rice from its stockpiles to private firms, a Commerce Ministry official said on Friday, as the authorities try to bring down huge stocks built up under a failed intervention scheme.

The rice was sold below the market price because it was old, Duangporn Rodphaya, head of the foreign trade department at the ministry, told Reuters, declining to give details. "The rice that is for sale is old, about two years old, so it has to be below the market price. But it's not way below the market. Private companies have additional costs to improve the quality. It's the same price we use for our tenders," she said.

The sales account for a fraction of the 18 million tonnes that Thailand had built up by this year under the intervention scheme, which effectively priced the grain out of world markets. An audit by the military government found that a fifth of that was either rotten or had gone missing.

Another official from the ministry, who declined to be named, said 59,600 tonnes of rice had been sold in the latest sale to four private companies for US$17.6 million.

That would give an average price per tonne of around US$295. It was unclear what grade of rice was sold. Benchmark five per cent broken rice is currently offered on the market at around US$425 free on board.

The government of Prime Minister Yingluck Shinawatra, which was ousted by the army in May, accumulated the stockpiles under a programme that paid farmers well above market rates for their produce.

The current government wants to offload the stocks to recover some of the cash spent, but the authorities want to carry out the sales gradually so as to avoid pushing prices much lower, Mr Duangporn told reporters earlier this week.

The military-backed government has held two rice auctions and sold around 70,000 tonnes of rice in each.

Duangporn told the reporters a third would be held soon and that discussions for deals with the Chinese and Iranian governments were also in the works.- Reuters