Thailand may barter rice for oil from Iran

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Bangkok, Oct 27 : Thailand, the world’s biggest rice exporter, plans to barter rice for oil from Iran, its commerce minister said on Monday. “Our senior officials plan to go to Iran by the middle of November to discuss the specifications of oil and rice that would be exchanged,” commerce minister Chaiya Sasomsab told reporters. Thailand would also continue talks with Iran on a straight government-to-government deal for selling rice.

Iran is one of Thailand’s major rice buyers. It buys around 1 million tonnes of rice annually, of which around 600,000 tonne generally come from Thailand.

However, it has bought only 60,000 tonne of Thai rice so far, staying on the sidelines during the first half of 2008 when Thai rice surged to a record high of $1,080 per tonne. Chaiya said that the Thai government could put on hold its plan to release 2.1 million tonne of old rice from its stockpiles. It is reckoned to have accumulated 4.3 million tonne of milled rice after buying from farmers in an intervention scheme since 2006. Around 2.1 million tonne of that is old rice and it has said that it would release quickly in a bid to prepare space for a new buying scheme starting on November 1.

“We could hold back the plan for at least two months, while Vietnam is selling its rice at cheaper prices, otherwise we would suffer losses,” he said. Vietnam’s export price is quoted at around $400 per tonne, compared with $630 for Thailand’s benchmark rice. According to a commerce ministry forecast, Vietnam is likely to have around 400,000 tonne of surplus rice to be sold in the two months before the harvesting of the new crop, which is due to start in March, Chaiya said. Between January to October, Thailand exported 8.7 million tonne of rice, up 31% from the same period last year when it sold 6.6 million tonne.