Thailand, RI hold talks on rice deal

Thailand, RI hold talks on rice deal

BANGKOK (Reuters): Thailand is holding talks to export 500,000 tons of rice to Indonesia in 1998 under a barter deal to help the nation feed its people as they try to cope with a crippling financial crisis, a newspaper said on Saturday.

The Bangkok Post newspaper quoted Niphon Wongtra-ngarn, president of the Commerce Ministry's Public Warehouse Organization, as saying that Indonesia had originally proposed to buy Thai rice on a 10-year payment term.

However, the commerce ministry was reluctant to agree to the "unacceptable" terms of payment as Thailand also had its own economic problems, it said.

Details of the payment terms were not immediately known. Niphon suggested that a barter trade deal be negotiated for the rice in exchange for Indonesian commodities which can be re- exported to third countries.

He said Indonesian palm oil was one possible item that could be exchanged for the rice as there was a shortage in Thailand. Indonesia's rice output has fallen due to last year's prolonged drought from the El Nio weather phenomenon and also a decrease in the land under rice cultivation.

Agriculture Minister Soleh Solahudin said on Thursday that Indonesia would keep importing rice for the next four to five years because demand was too high.

Indonesia, the world's fourth most populous nation with just over 200 million people, is facing its worst economic crisis in decades with prices of food rising, unemployment soaring and most trade at a standstill because of the plunge in the value of the rupiah currency.