The cabinet on Tuesday approved a plan to move on a three-year memorandum of understanding (MoU) to sell 3 million tonnes of white rice to the Philippines from 2014-16.

The MoU will allow the government to be eligible to join the bid to sell rice to the Philippines, which also has similar arrangements with Vietnam and Cambodia under government-to-government (G2G) deals.

The government joined the bid to sell rice to the Philippines three times in 2012 and 2013 but managed to sell only 120,000 tonnes in 2012 and 680,000 tonnes last year.

Charoen Laothamatas, president of the Thai Rice Exporters Association, said there is no wonder about the attempt, as the Philippines has never bought the amount committed in the MoU.

The MoU is nothing important, as the Philippines has the right to buy or not buy Thai rice. In the past the Philippines bought Thai rice only when the price and quality was right for them, he said.

Mr Charoen said the government should rather negotiate an increase in its rice-import quota to the Philippines to compensate for Manila s decision to maintain its high import tariff on rice.

The Philippines is obliged to eliminate the tariff on rice under the Asean Free Trade Agreement, although Manila has placed the grain on the "highly sensitive list and asked for permission to keep its import tariff on rice at 40% since 2010, he said.

In return, it promises to import at least 367,000 tonnes of Thai rice per year.

The Foreign Trade Department reported the government sold 7-8 million tonnes of rice over the last two years through G2G deals.

In a related development Tuesday, Somchart Sroythong, director general of the Internal Trade Department, said the government had sold a combined 547,000 tonnes of white rice and Hom Mali rice from government stocks via the Agricultural Futures Exchange of Thailand (AFET) since last October, fetching more than 7 billion baht.

The Commerce Ministry will put on sale 212,000 tonnes more of white rice and Hom Mali rice through the futures market Wednesday.

The rice will come from warehouses in Nakhon Sawan, Suphan Buri, Kamphaeng Phet, Phichit, Chiang Mai, Phitsanulok and Ubon Ratchathani.

The government plans to sell up to 1 million tonnes through the AFET and raise 18 billion baht.

AFET and G2G deals are major channels for the caretaker government to try to dispose of its massive rice stocks and raise proceeds to pay farmers facing late payments under the rice-pledging scheme.

Source: Bangkok Post