The trade ministry will hold an auction for 3.8 million tons of rice on Wednesday, while private firms are concered that the bidding will only benefit large exporters.

Rice distributors are keeping an eye on the auction of 3.8 million tons of rice being held by the Commerce Ministry on Wednesday, May 6.

There is speculation that the terms of reference for the bidding will be adjusted in favor of large rice companies, and it is expected that private firms will offer lower price for large quantities of rice and forego procuring rice later.

If this is the case, the government will suffer a loss of over 10,000 baht per ton of rice.

The Secretary of Commerce Minister, Praphol Milinthachinda, explained that the 3.8 million tons of rice are for export and many private companies have expressed interest in attending the bidding on Wednesday. The details of minimum prices and quantities have not yet been unveiled.

Praphol said the government can revoke the auction if bid prices are too low and a negotiations cannot be completed. Regarding defaults on rice purchases, he said the government will keep the advance payments and hold a new auction within 30 days.

Thai Rice Exporters Association President, Chukiat Opaswong, said that liquidating the government’s rice stockpile should be done graduall, to prevent a fall in global rice prices.

Source:TANN