The Commerce Ministry will release 1.5 million tonnes of its rice stockpile next month through bidding and the Agricultural Futures Exchange of Thailand.

The first bidding lot of 500,000 tonnes will be held next week and one for another 500,000 tonnes a couple of weeks after that. The rest will be sold through Afet early next month.

The ministry will release the stocks to make space for the second crop, which will enter the market next month.

It will also sell 30,000 tonnes of rice, or 6 million 5-kilogram bags, at a cheap price domestically, so as to help reduce consumers' cost of living.

A Commerce Ministry source yesterday said the Foreign Trade Department would hold the first bidding next Tuesday, with results announced the next day.

The first lot of rice bidding will include 350,000 tonnes of 100-per-cent white rice and 150,000 tonnes of Pathum Thani rice.

"The government must release the stocks to make way for new production. It is not good to release rice during the harvesting of the second crop, because that would affect domestic prices," said the source.

The government is expected to face a huge loss from the bidding following a drop in global prices.

The ministry last month cancelled bidding for 375,000 tonnes of rice, because it said the price offered by traders was too low.

The Thai Rice Exporters Association (TREA) said prices had been dropping continuously since last month. Jasmine rice was US$1,015 (Bt33,600) per tonne yesterday, down from $1,021 a tonne a week earlier. In the same period, Pathum Thani rice dropped from $832 a tonne to $816 and 100-per-cent white rice from $585 a tonne to $570.

Domestically, white rice is traded at Bt16,000 a tonne and Pathum Thani rice at Bt25,000.

TREA president Korbsook Iamsuri blamed the recent sharp drop in rice prices mainly on Vietnam devaluing its dong and sluggish global demand.

Vietnam is a major rice exporter, so the dong devaluation prompted rice prices to fall throughout the world. Importers have thus delayed placing new orders in the hope that prices will fall further, she said.

Korbsook said the government's release of some of its stockpile during this downward trend could cause difficulties for rice trading.

However, she predicts rice prices will fluctuate for a short period before increasing substantially, due to lower rice production in many countries, including Thailand.

Sombat Chalermwutinan, president of Asia Golden Rice, the Kingdom's largest rice exporter, said the government had delayed selling its rice stocks too long.

"The perfect period for releasing the stocks has passed. Now the government should not announce the sale of big or many lots, because that could make market prices fall further," he said.

In addition, the Public Warehouse Organisation reported it is preparing to sell cheap rice domestically upon approval by the National Rice Policy Committee.

Source: The Nation