Commerce Minister Porntiva Nakasai reiterated yesterday that the recent approval of a plan to sell a huge amount of rice from government stocks to a small, little-known exporter was in line with the government's guidelines.

She also insisted final approval on any rice deals rested with the national rice policy committee chaired by Deputy Prime Minister Trairong Suwannakhiri.

"We (the ministry) need to confirm that the approval is in line with the selling strategy of the national rice policy committee and the cabinet's guidelines, which call for a closed or offer-to-buy approach and are based on offered prices, under which 5% white rice should fetch at least 12,000 baht a tonne," said Mrs Porntiva. "Everything is processed according to the guidelines and we have done nothing irregular."

Mrs Porntiva said Dr Trairong would answer questions about the exact amounts of rice stocks sold and the prices fetched once he returns from Nigeria. Dr Trairong left for Nigeria and Senegal on Sunday and is scheduled to return to Thailand on Oct 5.

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

They are also obliged to export the entire amount in a time stipulated in the contract, which is based on the proposed purchase amount, and to place guarantee funds equivalent to 5% of the rice deal.

All guarantee funds are confiscated if the winning bidders fail to honour their commitment. The new bidding approach was intended to prevent any pressure on domestic rice prices.

Mrs Porntiva said offer-to-buy was just one approach applied by the government in selling rice, with others including government-to-government deals and sales through the Agricultural Futures Exchange of Thailand (AFET).

The Commerce Ministry has been the focus of criticism since it approved the sale of 1.8 million tonnes of milled rice from state stocks to MT Centertrade.

Exporters are wondering whether the small company is a nominee of another much larger entity. They are also sceptical about MT Centertrade's capacity to export huge volumes of rice by itself.

They allege that certain politicians and ministry officials have helped steer recent rice bids and have received millions of baht in kickbacks.

According to a trading source, a panel in charge of selling government stocks under the Commerce Ministry has approved as many as 4 million tonnes out of 5.6 million in government stocks.

That amount approved included 1.6 million tonnes that won final consent from the national rice policy committee to three large exporters _ Chaiyaporn Rice, Capital Rice and Asia Golden Rice.

According to a source, a ministry panel later approved another one million tonnes to Chaiyaporn Rice, Capital Rice, Asia Golden Rice, Thai Hua and Ponglarp. It also approved 1.8 million tonnes to MT Centertrade.

Nonetheless, only 1.6 million tonnes won final approval from the national rice policy committee, which has not yet made a final decision on the remaining amount.

Source: Bangkok Post