Thailand set for food deals with the Gulf

Bangkok Post | 18 August 2009

State and business ventures possible


Thailand is poised to establish joint ventures with Gulf states to secure rice, processed agricultural products and food supplies for the oil-rich countries. But the government has reiterated that foreigners will not be allowed to invest in farming and livestock businesses in Thailand.

"We are ready to form joint ventures with countries from the Middle East - be it on the government-to-government basis or business-to-business - in agricultural product processing and the food business," said Deputy Commerce Minister Alongkorn Ponlaboot.

"The Middle East is, in fact, Thailand's major rice client and we are all prepared to co-invest in setting up a rice-stocking centre somewhere in the Middle East to distribute the grain to that region."

Thailand is also ready to meet Middle East demand by supplying all kinds of rice and even by trying to cultivate in Thailand basmati rice, the Indian aromatic rice popular among Middle East consumers, he added.

At the first ministerial meeting between Asean and the Gulf Co-operation Council (GCC), held in late June in Bahrain, the Thai government saw Bahrain as well-placed to become a regional food production and stockpiling centre, and Dubai in the United Arab Emirates as a potential trading and distribution centre for the region, said Mr Alongkorn.

The food price scare - which has receded with the fall in commodity prices in the global downturn - pushed many oil-rich and food-poor Gulf states to seek long-term lease rights to overseas farmlands.

The Gulf states have focused growing interest on farmland in Southeast Asia, particularly in Thailand.

Regarding claims that foreign investors are illegally acquiring paddy fields through Thai nominees, Mr Alongkorn said a preliminary study by the ministry and the Department of Special Investigation (DSI) had found "movements".

In particular, 20 key rice-producing provinces such as Ayutthaya, Suphan Buri and Nakhon Nayok had seen foreigners try to purchase as much as 1,000-10,000 rai of farmland in the past three or four years, he said.

However, more details are not yet available.
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