Rice exporters are calling on the government to reconsider a plan to sell 3.8 million tonnes of milled rice from state stockpiles, as they fear this could push prices down by 10% over the next few months.

Thai Rice Exporters Association president Chookiat Ophaswongse said he strongly opposed the plan because it would threaten world and domestic rice prices, already weakened by higher supplies and shrinking world consumption.

Relatively high prices due to the government's price-pledging scheme have resulted in Thai exporters securing few purchase orders, he said.

Currently, Burmese rice costs as little as US$280 per tonne, while Thai rice averages $500, Cambodian rice $360 and Vietnamese rice $330.

As of April 17, Thai rice exports totalled 2.33 million tonnes, a 36.3% fall from 3.67 million tonnes in the same period last year, said Mr Chookiat.

Local 5% white rice prices were set yesterday at $552 per tonne, down from $568 two weeks ago.

The government recently announced that it was preparing to sell off 3.8 million tonnes of milled rice - 700,000 to 800,000 tonnes of Thai jasmine rice and the rest white rice. The plan would involve 3.04 million tonnes sold through a bidding process to exporters and the remaining 760,000 tonnes through the Agricultural Futures Exchange of Thailand (Afet).

"The tenders should be transparent and clear," said Mr Chookiat. "It should not turn out that only the same three or four bidders win the bids as usual."

He added that rice smuggling from neighbouring countries, especially Burma, to cash in on the government's pledging programme remained rampant.

In addition, rice imports under Thailand's commitment to the World Trade Organisation have increased significantly, with much imported cheap rice from Vietnam reportedly being used to defraud the pledging scheme.

Under its commitment to the WTO, Thailand must import 100 tonnes of rice, but the figure is said to have increased to tens of thousands.

"It is peculiar that, despite smuggling being prevalent, there has been no legal action from Thai authorities," he said.

Chanchai Rakthananon, president of the Thai Rice Mills Association, added that the government's plan for big-lot sales would definitely hit prices hard.

Local prices had fallen 1,000 baht from last month, when 5% white rice was 16,000 to 17,000 baht per tonne, he said.

Source: Bangkok Post