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China may buy Thai rubber at price above market value

Staff writer |
Thailand hopes to finalise an agreement with China soon for the purchase of 200,000 tonnes of rubber at above-market prices to encourage price rises in the future and improve the incomes of Thai farmers.

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After leading a mission of Thai officials to Kunming, China, for a second meeting on agricultural-product cooperation, Commerce Minister Chatchai Sarikulya said yesterday that Thailand would soon get good news about selling big lots of rubber and rice under closer cooperation between the two countries.

China has already signed a memorandum of understanding for the purchase of 2 million tonnes of rice and 200,000 tonnes of rubber, but the details of the agreement have not been finalised.

Only about 300,000 tonnes of rice were shipped to China last year under the MoU. China will soon sign a contract to buy 1 million tonnes of the new rice crop from Thailand.

Thailand has also asked China to purchase 200,000 tonnes of rubber for about 3-5 yuan (Bt16-Bt27) a kilogram above the market price. China has taken this request under consideration.

The two countries will finalise their agreement for rice and rubber purchases at the third meeting in Nakhon Ratchasima province in July. Thailand will also ask China to purchase other crops from Thailand at that meeting. By the middle of next month, representatives of Sinochem, a Chinese state-owned conglomerate, will visit Thailand to negotiate a rubber-purchase contract.

The Thai Foreign Trade Department and China's COFCO Group, another state enterprise, will also negotiate on a rice contract.

Thailand has guaranteed delivery of good-quality rice from the latest harvest for China. The sale will be based on the free-on-board price, while China will nominate its own surveyors to inspect its quality.

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