China National Cereals, Oils and Foodstuffs Corporation (COFCO) signed a memorandum of understanding (MOU) with Thai Rice Exporters Association (TREA) to purchase one million tonnes of Thai rice over the next five years on October 11.
President of TREA, Korbsook Iamsuri, said China plans to buy about 200,000 tonnes of Thai rice a year, with a requirement that purchases must be new grains.
Chookiat Ophaswongse, honorary president of the TREA, said that prices of Thai rice are unlikely to rise with the signing of MOU. In the meantime, it is not yet clear whether the rice COFCO intends to buy as stated in the MOU is the same as the amount China has already bought annually from Thailand.
Deputy Commerce Minister, Yanyong Phuangrach, said that in order to ensure foreign rice buyers' confidence, the Thai government is willing to allow COFCO or any foreign agencies to inspect the quality of rice in the government's stocks.
China buys about 300,000 tonnes of Thai rice a year from the private sector, with purchases usually made through TREA members.