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Zone proposed to import, mill paddy for re-export

Published: Jul 28,2010

The Commerce Ministry has floated the idea of a special zone to mill and re-export imported paddy as part of a plan to promote collective marketing among Asean members.

The initiative is also to curb smuggling of paddy from neighbouring countries, especially through overland borders.

Despite the zero tariff under the Asean Free Trade Area (Afta) on 23 farm products including rice, maize, soybeans, sugar, and garlic in effect since January this year, paddy continues to be smuggled from neighbouring countries.

According to Manat Soiploy, director-general of the Foreign Trade Department, the special zone would legitimise paddy imports from neighbouring countries and by millers within the area to be processed and packaged for export.

Nonetheless, the timing of the imports would remain under strict control to avoid harming local grain prices.

He said the plan would be a boon for Thai millers, who are utilising only 30% of their relatively high milling capacities, since highly efficient rice mills are in short supply in countries such as Cambodia.

Mr Manat said the designated zone should be located near the borders, most likely in eastern Thailand in Sa Kaeo or Prachin Buri, taking into account the capacities of the Thai millers.

Mr Manat said the plan will soon be submitted to Commerce Minister Porntiva Nakasai and comments from the Thai Rice Mills Association, the Thai Rice Exporters Association, and Thai Farmers Association will be sought.

Thailand also plans to expand its co-operation with Vietnam on rice, especially joint marketing, to prevent price competition, he said.

As for other agricultural crops such as maize and soybeans which Thailand is still struggling to meet domestic demand, the private sector will be urged to expand their contract farming in Burma, Laos, and Cambodia to supply to the Thai animal feed industry.

The country needs 3 million tonnes of soybeans per year while only 100,000 tonnes can be produced domestically.

According to Mr Manat, the Thai herbal industry is also entitled to greater benefits, as it could procure more raw materials from neighbouring countries due to the low tariffs under Afta.

During the first five months of this year, Thai exports under Afta were worth about US$5.1 billion, up 61.55% from $3.2 billion in the same period last year.

Source: Bangkok post

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