Russia makes good 20-year-old US$36 million Soviet rice export debt to Thailand

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BANGKOK, July 1 – Russia has paid its rice debt of US$36 million, over Bt1.1 billion, inherited from the former Soviet Union, according to Commerce Ministry spokesman Chatchai Chookaew.

The funds transfer was made on June 15 by the Russian government to the Export-Import Bank of Thailand (EXIM Bank). The debt payment was later transferred to the Ministry of Commerce, which will transfer the sum to the Ministry of Finance next week.

Thai Commerce Minister Pornthiva Nakasai travelled to the Russian capital on behalf of the Thai government to sign the agreement May 31 with Russian Deputy Finance Minister Sergey Storchak that Russia would repay its rice debt’s principal sum of about US$36 million to Thailand by July 12.

At that time, the minister said the accord was to maintain good relations between both countries and that some of the interest had previously been paid to the Thai government by Russia, and that the latter is an interesting market for Thailand, as the country is dependent on rice imports of 400,000 tonnes annually.

The US$36 million debt was in arrears for over 20 years as Thailand sold 200,000 tonnes of rice to the former Soviet Union in 1990 under a government-to-government contract. It was understood at that time to be repaid in two years, but the Soviet Union collapsed the following year and the Russian Federation government could not meet the obligation.

Several negotiations followed. The latest agreement relieves Russia of the accrued interest of US$9 million.