July 17, 2009

Thailand plans to sell all one million tonnes of corn from government stocks over the next two months, said a senior Commerce Ministry official on Thursday (Jul 16).

 

The Cabinet has given approval for the sales, and the committee will meet this week so the corn can be sold as soon as possible because some are decaying, said Prapol Milindhachinda, secretary to the commerce minister.

 

About 40 percent of the corn stocks are now of low quality as high humidity had caused fungal problems, he said.

 

The Commerce Ministry was expected to open the first tender this month to sell about half of the stocks, and open a second tender for the rest in August.

 

Prapol said the corn is for export only as they do not want it to have any effect on domestic prices. Domestic supply is increasing as farmers have started harvesting the 2009-10 crop and production is expected to peak in September. The rising supply is expected to hit prices over the next few weeks.

 

The government plans to revise its farm intervention schemes by setting a benchmark price for each crop and paying farmers the difference if they sell their crops to millers or traders below the guaranteed price.

 

Traders and exporters have expressed interest in the upcoming tenders as they could get grain at cheap prices.

 

Exporters are expected to bid at THB2.50 to THB5 per kg, depending on the quality, an exporter said.

 

Domestic corn prices were THB6.30 per kg, down from last month's THB7.50 and well below the THB8.50 per kg the government paid to farmers during an intervention scheme that expired at the end of March.

 

US$1 = THB34.0819 (Jul 17)