The government will start releasing milled rice and paddy from its huge stocks this week, but in small lots, rather than in batches of several hundred thousand tonnes only for export, according to Chutima Bunyapraphasara, director-general of the Foreign Trade Department.

"This period is opportune, as world rice prices are tending to rise," she said. She said the final decision on how much to release would be up to a sub-committee chaired by Commerce Minister Porntiva Nakasai.

Mrs Porntiva told Reuters yesterday that the government would release 600,000 tonnes from its paddy stocks for exporters to sell as parboiled rice.

The government has also negotiated government-to-government sales to buyers such as Malaysia, Indonesia and Iran, according to Ms Chutima. The stocks total the equivalent of 6 million tonnes of milled rice.

In the latest intervention scheme the government paid farmers 11,800 baht per tonne for paddy. That equates to around $550 to $580 per tonne for exportable white rice, which exporters say makes Thai rice uncompetitive compared to Vietnamese prices, which are around $100 to $150 per tonne cheaper.

Benchmark 100% B grade white rice is now quoted at $590 per tonne, up from $580 earlier, in line with rising domestic prices as most supply has been absorbed into the government stocks.

Traders and exporters welcomed the idea of releasing paddy, especially parboiled rice exporters who were having trouble finding supply.

"Paddy supply is right now limited, we believe the government is unlikely to suffer a loss should it release the paddy stocks during this period, as demand remains strong, " said Chookiat Ophaswongse, president of the Thai Rice Exporters Association.

Paddy prices are currently quoted at 11,500 baht per tonne, slightly lower than 11,800 baht paid to farmers.
Exporters said demand for Thai grains, particularly parboiled rice, remained strong, especially in Africa, since India still had a ban on rice exports.

"White rice is not as urgent an issue, as prices are now $150 per tonne higher than Vietnam's rice making exports unlikely," said Mr Chookiat.

Source: Bangkok Post