Bangkok, Jan 21 - Thailand, the world's biggest rice exporter, plans to release rice from its growing stocks to bring down storage costs and will try to sell through government-to-government deals, the Deputy Commerce Minister said on Wednesday.
"We need to release stocks as soon as possible in a bid to help reduce the government burden, and government deals are one of our options," Deputy Commerce Minister Alongkorn Pollabutr told Reuters.
"I think the best time to clear everything is before the end of the fiscal year," he said. Thailand's fiscal year ends on Sept. 30.
Alongkorn said the government was estimated to hold up to 5 million tonnes of rice, which it has bought from farmers in intervention schemes since 2005 to shore up prices.
That is double the figure of 2.5 million tonnes given by the Commerce Ministry in late 2008, before the latest intervention scheme started in November.
He said the government would start negotiating with key rice-buying countries, including some traditional rice importers such as Iran.
"In February, I will visit several countries in the Middle East, including Iran, and the rice issue will be on the table," Alongkorn said.
Iran has traditionally been a big buyer from Thailand, importing through government deals, but it took only 152,996 tonnes in 2008 through trading houses, down from 582,011 tonnes in 2007.
The government would also negotiate to sell rice to international organisations that have to stock rice for humanitarian aid, he said, without naming any organisation.
INDIRECT INTERVENTION
He said the new government that came to power in mid-December planned to cut intervention in the rice market gradually and allow prices to move in line with the market. However, the government would still support farmers indirectly.
"We will change the form of intervention," Alongkorn said.
The government planned to help farmers cut production costs, showing them how to increase yields, for example, he said.
Thailand's rice yield was 430 tonnes per rai (0.16 hectare), well below China's 1,000 tonnes and Vietnam's 778 tonnes.
Thailand is forecast to produce around 30 million tonnes of paddy in the 2008/09 (November-October) crop, of which 23 million tonnes will come from the main crop harvesting from November and around 7 million from the second crop to be harvested this March.
Thailand exported 10 million tonnes in 2008 and was expected to sell 8.5 million tonnes in 2009.