Rice exporters back a government plan to release most of its rice stockpiles this month through bidding but remain concerned about the transparency of the bidding process.

Shouldering huge stockpiles of rice, the Commerce Ministry late this month will hold an auction for most of its 5 million tonnes, in order to clear out its warehouses for the upcoming pledging programme. The ministry will first finalise government-to-government contracts with its trading partners for 500,000-600,000 tonnes as another method of releasing its stockpiles.

Thai Rice Exporters Association president Chookiat Ophaswongse said this was an appropriate time to release part of the government's huge stockpiles into the market, because market supply had been down these past few weeks.

However, he expressed concern that the government releasing a great volume at once might hurt exports during this period of slow trading.

He said small amounts should gradually be released through bidding instead. The government should also ensure that all traders have a chance to win the bidding, in order to prevent market dominance by only two or three large winners.

In the past, the ministry would release huge rice stockpiles to only one large exporter, causing difficulties for small traders in the market.

A ministry source said the ministry had previously targeted releasing about 1 million tonnes of rice via government-to-government contracts. So far, several rice-importing countries have expressed interest in buying rice from the government.

The government will affirm the countries' intentions and should finalise the contracts this month, said the source. Countries interested in buying rice from the government include Angola, Liberia and Djibouti.

The source added that the ministry was tentatively considering a limit of only 300,000 tonnes per bidder. This Friday, it will finalise its guaranteed price for the upcoming second-crop harvest, targeting 2.5 million tonnes of white paddy rice.

Source: The Nation