Thai rice exporters are calling for the government to release at least some of its stockpile, to relieve the shortage of supply for export.

The move came after the government abruptly terminated the auction of 1.95 million tonnes of the crop.

Thai Rice Exporters Association president Chookiat Ophaswongse said the government should consider releasing its huge rice stocks rapidly, in order to alleviate the shortage for export, particularly parboiled rice.

The stocks should be released in small lots, to prevent the rice price from dropping.

"This is the right time to release part of the government's huge rice stockpiles, in order to inject more supply for export. If the government decided to release them later instead, Thailand might face difficulty selling the rice, because India will soon resume exporting the crop," said Chookiat.

India is expected to export about at least 2 million tonnes of parboiled rice soon as its stockpile reaches 28 million tonnes. That country's government is closely monitoring the world export situation and the monsoon rains to see how they may affect its rice crops. It will probably export rice next month or in August.

A source from Thailand's five largest export companies said the government must release its stockpiles, in order to alleviate the huge financial burden for storage.

The source suggested the government consider releasing part of its stocks of paddy rice, because exporters have a high demand for it, as it can be processed into parboiled rice.

"Thailand's rice-export volume has dropped continuously since early this year, but only parboiled rice enjoys high demand in the market. Exporters are facing a supply shortage, because most farmers have entered into the government's pledging project, which carries a high guaranteed price," said the source.

The Commerce Ministry said Thailand's rice-export volume dropped a sharp 30.6 per cent year on year in the first five months this year, to 3.47 million tonnes.

Chookiat said demand was lower for Thai white rice, because it was priced too high in the world market. Only parboiled-rice exports have increased this year, due to higher demand in Africa and the Middle East.

The price of Thai white rice is now quoted at US$550 (Bt18,700) per tonne, much higher than the Vietnamese product, which is quoted at $410.

Chookiat said if the government decided to release some of the stockpiles to exporters at this time, it would ensure that the Kingdom's rice-export volume achieved this year's target of 8 million to 8.5 million tonnes.

Source:The Nation