The government is set to start selling rice from its huge stockpile for export this month and plans to introduce a put option programme for this year's first-crop production due in November.
Different strains of rice are on display at the two-day convention that began yesterday at the Royal Thai Navy Convention Hall.
Guidelines from the Foreign Trade Department on how to release the state stocks will go before the cabinet right away if they win approval from the National Rice Policy Committee next week, said Commerce Minister Porntiva Nakasai on the sidelines of the Thailand Rice Convention 2009 yesterday.
At present, the government holds a record six million tonnes of rice. Some traders said the government stockpile could rise to seven million tonnes of milled rice by the end of July, when the latest government buying scheme is due to end.
The government is paying farmers 11,800 baht per tonne for paddy under the current intervention scheme. It is expected to step in again when the next crop comes to market in November.
According to Chutima Bunyapraphasara, director-general of the Foreign Trade Department overseeing rice trading, apart from tenders to rice exporters, the government is also considering government-to-government deals.
Mrs Porntiva met yesterday with Majid Passania, chairman of the Government Trading Corporation of Iran, and said Thailand was looking forward to G-to-G deals with potential buyers from Africa, the Middle East and Iran.
Iran imports three million tonnes of rice annually, mostly aromatic grains.
From January to May 2009, Iran bought only 2,263 tonnes of Thai rice from private traders. In 2008, it imported 73,136 tonnes.
Iran has slowed its rice imports since 2008 due mainly to economic sanctions imposed by the West because of its nuclear programmes.
In a related development, guidelines for a put option programme to be used instead of the conventional rice mortgage scheme that offers relatively high pledging prices are likely to debut for this year's main crop should they sail through the National Rice Policy Committee next week, said Deputy Prime Minister Korbsak Sabhavasu.
An option programme would give farmers an incentive to hold on to their rice in hopes of benefiting from higher prices in the future. This in turn would help reduce pledges under the normal mortgage programme, reducing state stockpiles and helping support market prices by reducing supply distortions.
"The new option programme would set an appropriate rate of daily reference prices based on farmers' production costs and a certain level of profits. In this way, the government will compensate farmers if the price of their output falls below the reference prices."
Source: Bangkok Post
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