The government is set to sign a memorandum of understanding (MoU) on rice sales with China today, but the amount to be sold will probably remain vague.According to a Government House source, Commerce Minister Boonsong Teriyapirom yesterday sought cabinet approval of the draft MoU on rice trade between the Thai and Chinese governments without stating the amount of rice or the purchase framework as bargained by China.

The source said Chinese officials see the amount proposed as too high.

Earlier this month, Mr Boonsong said the government would seek a deal to sell 5 million tonnes of rice a year to China from 2013 to 2015.

The amount proposed is in fact many times higher than the amount of rice China usually imports each year: between 500,000 and 1 million tonnes from several countries including Thailand.

China imported 49,483 tonnes of Thai rice in 2008, then 328,238 tonnes in 2009, 264,207 tonnes in 2010 and 267,846 tonnes in 2011.

In the first 10 months of this year, China imported 90,000 tonnes of Thai rice, mostly fragrant Hom Mali.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said China is expected to import just 100,000 tonnes of Thai rice this year, given the higher prices for Thai grains.

Yesterday, rice exporters Thai Fah, Asia Golden Rice and CP Intertrade signed an MoU with Cofco Ltd, China's largest grains trader. The rice is due for delivery next year.

A rice industry source said China's import demand this year is unusual, as the southern area of the mainland is suffering from drought.

Today's MoU is unlikely to include a binding commitment on the amount of rice to be bought from Thailand, according to the source.

"Thailand's opportunity to sell rice [to China] is not that easy, as the price of Thai rice is up to US$100 a tonne higher than Vietnam's grains," the source said. "Worse still, the price of Myanmar's rice is $30 to $40 cheaper than Vietnamese rice.

"Our rice is sellable if we dare set the selling price as low as $450 a tonne. But that means a massive loss."

Source: Bangkok Post