Rice exporters are struggling hard to fill their orders, as supply appears low and much of the grain is in the government hands, local traders said.

They blame the government's delay in offloading 2.6 million tonnes of rice from its stockpile. The price-pledging scheme, which has so far attracted more than 4 million tonnes of paddy out of the targeted 6 million tonnes from the second crop, has worsened the situation.

The price war has intensified as exporters of parboiled rice can barely meet strong foreign demand after India, the world's leading parboiled rice exporter, limited its exports last year.

"While the exporters of white rice are offering 18.50 baht a kilogramme, those who badly need parboiled rice are willing to pay higher, at more than 20 baht to get the rice," said Vichai Sriprasert, honorary president of the Thai Rice Exporters Association.

Parboiled rice exports have risen with the lack of Indian supply. More than 980,000 tonnes were sold for export in the first five months compared to 855,000 tonnes of premium-grade white rice.

Parboiled rice export prices rose to about US$600 a tonne last week, higher than the $576 average for premium-grade white rice.

Parboiled rice, mainly consumed in Africa, is made by soaking, pressure steaming and drying rice before milling.
Besides India and Thailand, the US and South American countries are also major exporters in an annual global trade of about 5 million tonnes.

Mr Vichai, also president of the leading parboiled rice exporter Riceland International Co, urged the government to release rice to meet the high demand.

New Delhi plans to resume exports next month and to sell more than 2 million tonnes of parboiled rice, said Chookiat Ophaswongse, president of Thai Rice Exporters Association. India's resumption of international trade would hit Thailand's rice exports, especially parboiled rice, as local prices are distorted by the pledging programme.

Thai rice exports next month could shrink by 200,000 tonnes, from an average of 800,000 tonnes, if Indian rice enters the global market, said Mr Chookiat.

The government should also unload rice to ease tension in the market over rising domestic prices, he said.

Strong prices have led farmers to sell paddy to traders offering more than the pledging programme's 11,800 baht a tonne, said an industry source.

This has cut paddy entering the intervention programme, targeted to mortgage 6 million tonnes by the end of this month. The scheme amounted to 4.29 million tonnes from March 16 to July 1.

Source: Bangkok Post