April 11, 2009

Thailand to sell corn reserves to foreign importers only

The Thai government plans to sell 450,000 tonnes of its corn stocks only to foreign importers to prevent the crop from ending up in the domestic market, the deputy prime minister said.

Authorities are worried that some corn sold to local exporters might in fact end up on the domestic market, which would depress prices and waste previous efforts to support prices.

Deputy Prime Minister Korbsak Sabhavasu has suspended a plan to sell the corn to Thai exporters through an unpublicised tender launched last month. He said from now on, every farm stock release including corn must be approved by the government.

In the tender last month, bidders offered THB2.50 to THB5.75, well below the THB8.50 per kg paid by the government under the intervention scheme that expired March 31. Domestic corn prices were at THB6.40 per kg on Friday (Apr 10).

The government could lose at least THB2 billion if the sales had went through, Sabhavasu said.

US$1 = THB35.4414 (Apr 11)