Big rice stock sales planned

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Big rice stock sales planned
Published: 24/07/2010 at 12:00 AM
Newspaper section: Business

The government expects to sell between 2.5 million and 3 million tonnes of rice or 50% of its stockpile of more than 5 million tonnes this year.

Deputy Prime Minister Trairong Suwannakhiri and Commerce Ministry officials leave today on a four-day trip to Malaysia and Indonesia to negotiate government-to-government rice sales.

"Now is the right time to sell the rice stock because if it is kept too long, its quality will worsen. We won't sell more than 3 million tonnes to prevent future shortages," he said.

The Rice Policy Committee is limiting purchases to no more than 300,000 tonnes per order.

Apichart Jongsakul, secretary-general of the Office of Agricultural Economics, believes now is a good time to sell before the main crop harvest and because production was sapped by drought. The second crop is harvested in July and August.

Malaysia approached Thailand previously to buy 300,000 to 400,000 tonnes of 5% white rice and asked for a discount of US$100 per tonne to compete with Vietnamese prices.

The Commerce Ministry plans to focus on pricing targets instead of volume this time. It will also promote higher quality and value-added rice products.

The ministry reported a slowdown of world rice production this year because of drought, and said Thailand might export less volume than Vietnam.

Thailand exported 4 million tonnes of rice in the first half and its export price was almost 50% higher than Vietnam's. The ministry expects to meet the export target of 8.5 million tonnes this year with projected total production of 31.46 million tonnes in the 2009-10 crop.

As of July 21, the Thai Rice Exporters Association reported the free-on-board (FOB) price of Thai Hom Mali grade A rice at $1,097 per tonne for the 2008-09 crop and $999 for the 2009-10 crop. Pathum Thani fragrant rice was $774 and 5% white rice was $432 per tonne.