The Thai government is trying to sell off the rice from its state stockpiles in order to pay arrears owed to the farmers under the rice pledging scheme. The government is trying to negotiate with Malaysia and sell 5 percent broken white rice to between 600,000 and 800,000 tonnes.
The traders have forecasted that the deal will have to be priced significantly below the market rate in order to finalize the sale. The Stockpiles have already depressed the international prices with Thai rice rate far below than Vietnamese prices for the first time in two decades.
Surasak Riangkrul, head of the Commerce Ministry’s Department of Foreign Trade has commented that they are currently discussing with Malaysian state-buying agency BERNAS on the prices and they hope to close the deal soon. Thai government and BERNAS both have declined to comment on the price negotiation.
According to the Thai Rice Exporters Association, Malaysia has imported around 1.2-1.3 million tonnes of rice annually in past decade. Thai 5 percent broken white rice was quoted at US$380 (RM1228) per tonne which is lower than compared to Vietnam, which quoted US$400 a tonne. Traders are estimating that Thailand may offer much lower prices and it might go to US$20-US$30 per tonne as the price is deteriorating every day.
Thailand Rice scheme was introduced with the aim of helping the rural supporters under which the state paid farmers well above the market price but this scheme ultimately led to loss and fuelled a political crisis in the country, which led to abrupt end of the policy. As of April, about 94 billion Thai baht (RM9 billion) was still owned under the scheme to around 742,000 farmers