China's state owned Cofco, the country's largest grain trader, has inked agreements with three Thai rice exporters with a combined volume of 260,000 tonnes, worth Bt6.24 billion - the figure announced by the government - to start shipping next year, the Thai government said.
The Thai exporters include Asia Golden Rice, accounting for 120,000 tonnes, Thai Fah (2511) (100,000 tonnes) and CP Group (40,000 tonnes). Export prices will be negotiated later depending on prevailing market figures.
The agreement was signed separately from yesterday's memorandum of understanding (MoU) on rice between China and Thailand.
A source from the Thai Rice Exporters Association said deals had been inked with a total of seven Chinese importers including Cofco. Under the agreement, China wants to purchase jasmine rice, sticky rice and white rice.
"The export deal should come up with fair prices for the two countries [which will] be [settled on] later. This contract is drawn up to encourage rice cooperation between the two countries," said the same source.
Prime Minister Wen Jiabao of China also witnessed the agreements' signing ceremony held at the Thai-Chinese Chamber of Commerce yesterday during the Chinese premier's official two-day visit to Thailand. Wen also witnessed the MoU on rice between Chinese Commerce Minister Chen Deming and Thai Commerce Minis-ter Boonsong Teriyapirom, signed at Government House yesterday.
However, China doesn't want to finalise the total import volume and period of the MoU now, saying it would force an obligation on Beijing which also imports rice from Vietnam, Pakistan and India.
Another source from the association said China did not want to promise any immediate figure with Thailand that might jeopardise the government's current import deals.
Tikhumporn Natvaratat, deputy director-general of the Foreign Trade Department, said Thailand is trying to export as much as it can. China's rice import volume averages 1.5 million-2 million tonnes per year, mainly from Vietnam and Thailand. Beijing has already imported 2.6 million tonnes of rice so far. Thailand last year exported to China 320,000 tonnes of rice, mainly jasmine rice.
"The MoU is designed to show that China is willing to import Thai rice and also to signify the relationship between the two countries," said Tikhumporn, adding that the average export price (under the MoU) is US$800 (Bt24,565) per tonne. Previously, the MoU committed China to purchase 5 million tonnes of rice from Thailand within three years.
The department is planning to send a rice trade mission to China in the near future to negotiate in detail the first-lot imports.
Previously, Thailand and China had separately inked government-to-government deals to sell 2 million tonnes of Thai rice to China, without any certain export period.
The government has said Thailand's total rice export under government-to-government deals will reach 1.7-1.8 million tonnes, worth Bt70 billion this year, to Indonesia, Bangladesh and China.
As of November 19, Thailand's total rice export volume reached 6.17 million tonnes, a significant drop of 35 per cent, while export value achieved $4.2 billion, down by 23 per cent. Thailand is the third biggest rice-exporter after Vietnam and India. It is expected the Kingdom's exports will reach 7.3 million tonnes this year.
Thailand will form a rice cooperative with Indonesia, Malaysia, Singapore and Brunei to secure rice supplies to them.
(Source: The Nation)