Academics and exporters alike believe there is something very fishy behind the government's rice deal with a Chinese state enterprise, with some saying revocation of the deal could be due to government attempts to ease pressure from being investigated.
Farmers block the Rama II Highway near a bypass to Wang Manao village in Pak Tho district, Ratchaburi province. As a result, motorists could not take the bypass as a shortcut to the South on Tuesday. (Photo by Chanat Katanyu)
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the rice-trading community has suspected for long that the deal to sell 1.2 million tonnes of rice was fake from the outset.
When the National Anti-Corruption Commission (NACC) started investigations into the transparency of rice deals between Thailand and China, the government declared it was scrapping the deal to cut off any more investigations, he said.
"We are all aware that this deal was not real from the beginning, as the state enterprise is based in Harbin in northeast China, where people consume short-grain rice, while Thai rice is long grain," Mr Chookiat said, adding that the enterprise had not been awarded a quota by China National Cereals, Oils and Foodstuffs Corporation (Cofco) to import long-grain rice.
Caretaker Deputy Prime Minister and Commerce Minister Niwatthamrong Bunsongphaisan said on Tuesday China had pulled out of the deal, adding only that China lacks confidence to do business with Thailand after the NACC started investigating.
The government signed a contract last November to sell 1.2 million tonnes of 5% white rice on a government-to-government (G2G) basis to Beijing Great Northern Wilderness Rice Industry, a subsidiary of the state-owned Beidahuang Group, but the value of the deal was not disclosed.
Nipon Puapongsakorn, a distinguished fellow at the Thailand Development Research Institute, said the deal revocation also possibly stems from the Chinese firm's fears of a serious penalty if it were found the deal was done without the central government's approval.
An industry source said the Chinese government does not want to be cited in the Thai government's claim of G2G sales.
"As far as we're aware, the central government in Beijing was worried about a report of this rice deal with the Thai government and called the chairman of the group for interrogation," he said. "The chairman said he had not acknowledged the deal, which was signed by the group's officials."
He said a G2G deal would be handled only by Cofco.
"The government has been playing a game for two years to mislead the people that it can sell its rice stocks on a G2G basis,'' he said. ''But that's a lie."