Thailand: Officials struggling to move rice mountains by 2017
Thailand’s military government will struggle to offload by a 2017 deadline some 14 million tons of rice in state warehouses left over from a policy of the civilian government it ousted, traders and exporters said.
The government inherited 18.7 million tons of rice built up under the previous government’s rice subsidy scheme and has since held 12 auctions, offloading about 5 million tons of rice worth U.S. $1.39 billion.
In 2015, the junta set a target to offload the remaining 13.7 million tons by 2017, including 6 million tons of spoiled rice that the Commerce Ministry says is no longer fit for human consumption.
The disposals have been a headache for the government, which is also trying to appease rice farmers accustomed to government subsidies and minimum prices that were sometimes double the market rate.
The rice in Thai state warehouses is more than three times the amount imported in 2014 by top consumer China, and rice traders and exporters doubt it can be cleared by 2017.
“I don’t think it’s possible, but even if it is, offloading that much rice within a short time will have a negative effect on market prices,” said Supachai Vorraapinyaporn, president of Thailand’s third-biggest rice exporter.
The government says, however, that it is prudent about determining when to hold its auctions. Reuters