Thailand signs pact over rice and rubber with China

THAILAND and China yesterday signed a memorandum of understanding on agricultural products, related to the sale of rice and rubber to Chinese firms.

The two countries signed a number of co-operation documents on agriculture and transportation, including the joint railway project, last December. However, the deal on the train project has made no significant progress over the past 11 months, and both sides are still far from concluding the pact.

However, Prime Minister Prayut Chan-o-cha affirmed yesterday that the planned bilateral railway project would go ahead, though he admitted that both sides need time to negotiate several aspects.

As for the agricultural MoU, the Commerce Ministry will sell a million tonnes of newly-harvested rice to China. Commerce Minister Apiradi Tantraporn said the rice would be sold to China National Cereals, Oils and Foodstuffs Corporation (COFCO), China's state-owned food processing holding company.

In a statement, the Commerce Ministry said the Agriculture and Agricultural Cooperatives Ministry would also sell 200,000 tonnes of rubber to Sinochem, a Chinese conglomerate primarily engaged in the production and trading of chemicals and fertiliser, as well as exploration and production of oil.

Since the May 22, 2014 coup, Thailand has clinched government-to-government rice deals with China, Indonesia and the Philippines, the Commerce Ministry said. Including the new deal signed yesterday, G-to-G rice deals with China involved 3.4 million tonnes of rice, valued at Bt50 billion in total.

She explained that under yesterday's new MoU, Thailand would deliver 100,000 tonnes of rice per month at a price in line with global levels at the time of delivery.

As for the rail project, Prayut said there were some differences about the proportions of the joint venture - as to how much each side will invest and what the financial deal will be.

"We will have a joint-venture firm. Nobody wants to rely just on the other, but we have to keep in mind the benefits for the people such as how much the tickets should cost," he said.

The premier was responding to media reports that the project was in jeopardy after China increased the construction cost from Bt400 billion (S$15.6 billion) to Bt500 billion and demanded high interest on loan to be extended to Thailand for the joint investment.

Thailand and China signed a memorandum of understanding last year to jointly develop the railway linking Nong Khai to Bangkok and Map Ta Phut. But after nine rounds of negotiations, no progress on the deal was made.

However, Prayut insisted that his government would not allow the project to fail.

He explained that other issues that needed to be negotiated centred on the building of the rail system, the operation of the trains and profit sharing.