Tough regulations and doubts in rice quality cause small entrepreneurs to shy away from rice auction

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BANGKOK, 29 July 2013 Honorary President of the Thai Rice Exporter Association Chukiat Opaswong pointed out that tough bidding regulations and the uncertainty in the quality of rice in government stockpiles have caused small-scaled rice entrepreneurs to shy away from the ongoing rice auction. 

The auction for 350,000 tons of pledged rice from the 2012/2013 harvesting season started last Friday. Offers will be read today, and another batch of rice will be auctioned tomorrow. Only 5 major companies have so far participated in the auction.

The Government mandates winners of the rice auction to export the product within 45 days. Failing to do so, they will face a fine of 25% of the value of rice in delay.

Mr. Chukiat speculated that the tough condition may have put smaller exporters in difficult situation, in addition to the ongoing looming doubt on the rice quality.

He also voiced his opinion that the auction might be cancelled if the auctioning prices are too low, saying that the scenario is likely due to the questionable quality of rice and the aforementioned auction condition.

He said that if the government were able to sell the pledged rice at 12 baht per kilogram, the rice exports would cost around 460-470 dollars per ton, which is a competing price to that of India’s 440 dollars per ton.