Barter Economics: Rice for Oil

[ambitious_wench]

turnberryknkn pointed to this article on how the nations are resorting to barter in the face of the crumbling economy.

Thailand could barter rice for oil from Iran
Mon Oct 27, 2008 8:20am GMT
BANGKOK (Reuters) - Thailand, the world's biggest rice exporter, plans to barter rice for oil from Iran, its commerce minister said on Monday.

"Our senior officials plan to go to Iran by the middle of November to discuss the specifications of oil and rice that would be exchanged," Commerce Minister Chaiya Sasomsab told reporters.

Thailand would also continue talks with Iran on a straight government-to-government deal for selling rice.

Iran is one of Thailand's major rice buyers. It buys around 1 million tonnes of rice annually, of which around 600,000 tonnes generally comes from Thailand.

However, it has bought only 60,000 tonnes of Thai rice so far this year, staying on the sidelines during the first half of 2008 when Thai rice surged to a record high of $1,080 per tonne.

Chaiya said the Thai government could put on hold its plan to release 2.1 million tonnes of old rice from its stockpile.

It is reckoned to have accumulated 4.3 million tonnes of milled rice after buying from farmers in intervention scheme since 2006.

Around 2.1 million tonnes of that is old rice that it has said it would release quickly in a bid to prepare space for a new buying scheme starting on November 1.

"We could hold back the plan for at least two months while Vietnam is selling its rice at cheaper prices, otherwise we would suffer losses," he said.

Vietnam's export price is quoted at around $400 (259 pounds) per tonne, compared with $630 for Thailand's benchmark rice.

According to a Commerce Ministry forecast, Vietnam is likely to have around 400,000 tonnes of surplus rice to be sold in the two months before the harvesting of the new crop, which is due to start in March, Chaiya said.

Between January to October, Thailand exported 8.7 million tonnes of rice, up 31 percent from the same period of last year when it sold 6.6 million tonnes.

(Reporting by Apornrath Phoonphongphiphat; Editing by Alan Raybould)