The government is in talks to supply the Philippines with 500,000 tonnes of milled rice, exporters say. The move comes as rice shipments are being stepped up to help clear state stockpiles ahead of the 2009-10 main crop season.

Negotiations between the Foreign Trade Department and Manila are pending, but the volume sought is not known because the Philippine government's priority supplier is Vietnam, said Chookiat Ophaswongse, president of the Thai Rice Exporters Association.

Thailand sold more than 500,000 tonnes of rice to the Philippines in 2008, but shipments this year dwindled to 80,000 tonnes. The Philippines has imported 1.8 million tonnes of milled rice this year, with the bulk of it from Vietnam.

Mr Chookiat predicted Manila would possibly raise its rice imports in the year to come to more than 2 million tonnes, partially because two typhoons destroyed thousands of hectares of crops.

The deal with the Philippines would likely be a government-to-government contract, he said.

According to Mr Chookiat, rice exports from Thailand may beat forecasts this year and hit a record in 2010 on higher African demand and a lack of Indian exports due to domestic drought.

He said exports could be 8.7-9 million tonnes this year, beating a forecast of 8.5 million, possibly reaching 10 million tonnes next year.

"Next year I believe the trend will go on like this because India is still not exporting and consumption will go up because economies are getting better," he said.

However, he warned benchmark Thai rice prices could ease to between $500 and $520 a tonne by year-end, from $535 currently, as the new crop starts flooding the market from November.

The country is expected to produce around 23-24 million tonnes of paddy in the main crop this year.

Production in the main crop last season was estimated at 23.23 million tonnes. Total production, including 8.4 million tonnes from the second crop, is estimated at 31.65 million tonnes of paddy.

Source: Bangkok Post