The government may recall the latest rice bids, particularly for glutinous rice, if the prices offered by exporters are considered too far below market prices, says Commerce Minister Porntiva Nakasai.

But the decision will depend on price negotiations by the ministry's Foreign Trade Department, which started bargaining yesterday with the bidders offering the highest prices at the tender staged this week, she said.

Final prices were due to be proposed to Mrs Porntiva for approval on Monday and to the cabinet on Tuesday.

The minister said the final decision on whether to stage new bids would rest with the National Rice Policy Committee and the cabinet.

"The Foreign Trade Department's director-general has been given full authority to decide the best prices for the government," she said yesterday.

"I will just add comments if the prices offered are too low compared with market prices [in the interest of] creating the greatest benefits and curbing hefty operating losses for the government."

The government on Thursday opened bids to sell about 375,000 tonnes from its rice stocks, drawing offers from 22 companies for far more than the amount being offered.

Bidders have proposed offers for a total of 489,308 tonnes, with 5% white rice making up 246,206 tonnes and glutinous rice the rest. The total proposed prices are worth 7.06 billion baht.

The bidding prices for white rice are 14,000 to 16,000 baht a tonne, with glutinous rice at 10,000 to 17,000 baht Lower bid prices offered despite high demands from the world market.

The market price for white rice is currently quoted at about 16,900 to 17,000 baht per tonne, with the price for glutinous rice as high as 22,000 to 22,100 baht per tonne.

However, the minister said she was still optimistic that the Foreign Trade Department through bargaining would achieve better prices with exporters given the world's strong demand for rice and the robust price outlook.

According to the United Nations Food and Agriculture Organization, rice prices are unlikely to fall before March as major exporters restrict overseas sales amid lower supplies.

"Prices are unlikely to subside before newly harvested crops reach the market in March and April," the FAO said yesterday.

Rice exports dropped in China, Pakistan, Thailand and the US and government curbs in India and Egypt also restrained availability in 2009, it said.

Rough rice has advanced 22% on the Chicago Board of Trade from last year's low as the Philippines, the biggest buyer, accelerated purchases to secure supplies after storms destroyed at least 1.3 million tonnes of the crop. Concern that India may become a net importer after a drought has also lifted prices.

Global production last year totalled 678 million tonnes, a decline of 2% from a year earlier, the FAO said.
Still, the global rice trade this year is projected to increase to 30.5 million tonnes from 30 million in 2009, driven by demand from the Philippines, Brazil and the US. Exports by Thailand, China, Burma and Vietnam are expected to rise, said the FAO.

World stocks at the end of the 2010 marketing year are forecast to rise by 6 million tonnes to 123 million tonnes, according to the FAO. It has revised up India's closing stock forecast for 2009-10 to 13.6 million tonnes, from 11 million projected last September.

Source: Bangkok Post