Rice traders claim irregularities have emerged after the government adopted a new auction method to sell its rice stocks. A source from the rice trading industry said the Commerce Ministry's recent approval of a plan to sell 1.1 million tonnes of milled rice from government stocks to a small exporter had raised eyebrows.

Most traders believe the small export firm, which handles only a few thousand tonnes of rice a year, lacks the capacity to export huge volumes of rice by itself.

Some exporters believe the small business is probably a nominee of one major rice exporter, now defunct, which had defaulted after bidding for 1.8 million tonnes of rice with the ministry.

Politicians are alleged to have helped steer the recent 1.1-million-tonne rice bid and to have received millions of baht in kickbacks. The source said the small exporter might sell the rice it bought from the government's stocks to millers and other exporters.

However, the 1.1-million-tonne bid has yet to win approval from the national rice policy committee chaired by Deputy Prime Minister Trairong Suwannakhiri.

Prime Minister Abhisit Vejjajiva also instructed the Commerce Ministry last week to clarify the deal.

With the consent of the national rice policy committee, the ministry has so far sold about 1.6 million tonnes of milled rice from its stocks to three large exporters - Chaiyaporn Rice, Capital Rice and Asia Golden Rice - through a closed or "offer-to-buy" auction.

Under the offer-to-buy approach, companies that have secured foreign purchase orders are allowed to directly negotiate with authorities to buy stocks.

Korbsook Iamsuri, president of the Thai Rice Exporters Association, said the new method was not transparent. Several exporters felt they were treated unfairly, as most were unaware about the new method, she said.

However, Yanyong Phuangrach, the ministry's permanent secretary, said the aim of the auction method was to maximise benefits and stabilise domestic prices while clearing state stocks.

The government also needs to accelerate rice sales, as new output is about to be released to the market.

The government aims to clear all 4.2 million tonnes of rice it its stocks by the end of this year, as several countries have shown interest in light of natural disasters that have damaged their crops.

Officials also expect to seal deals for another one million tonnes of rice to Nigeria during Mr Trairong's visit to Nigeria and Senegal between Sept 26 and Oct 4, according to his adviser, Niphond Wongtra-ngan.

Source: Bangkok Post