The Department of Foreign Trade (DFT) is to hold discussions with Cofco Corporation, a Chinese state-owned company involved in the production and importation of agricultural products, over the shipment of 500,000 tonnes of Thai rice.

Arada Fuangtong, director-general of the DFT, said China agreed to purchase 500,000 tonnes of rice from Thailand, which includes 280,000 tonnes outstanding from earlier government-to-government (G2G) commitments.

She said that while previous discussions took place between the department and Cofco, this round of negotiations must await an official confirmation letter from the Chinese government before proceeding.

Typically, G2G rice purchase agreements with China have a delivery timeframe of one year. If the delivery cannot be fulfilled within this period, an extension is negotiated annually, she said.

Mrs Arada added that for this deal, the department plans to offer various varieties of rice, including glutinous rice, while previous sales were limited to 5% white rice.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said market sentiment has improved following reports that China intends to purchase 500,000 tonnes of rice from Thailand.

Rice prices have stabilised and are expected to decline further.

Stakeholders, including rice mills and exporters, are closely monitoring developments and holding their stocks as they await further details on the actual delivery timeline, Mr Chookiat said.

Exporters expect these shipments to begin next year, as G2G rice sales require about two months for necessary legal procedures and contract arrangements.

If deliveries are executed in batches, such as 100,000 tonnes a month, it is likely that domestic rice prices will increase.

Under a G2G agreement, the government designates multiple exporters for shipments, creating competition in the market for rice procurement.

However, any price hikes are expected to be moderate, as global demand from major importing countries remains a factor, particularly from Indonesia, which has not imported Thai rice this year, and the Philippines, which is still finalising its import plans for next year, Mr Chookiat said.

From January to October, rice export licences recorded shipments totalling 6.65 million tonnes, a 20% year-on-year decrease.

Mr Chookiat added that if exports for the remaining months of the year (November and December) average about 700,000 tonnes a month, Thailand’s rice exports are projected to exceed 8 million tonnes in 2025.