Many rice exporters have shown strong interest in purchasing about a million tonnes of government rice, as market supplies are tight.

It is now out of harvest season and fear of natural disasters has caused lower production in many countries.

A rice-exporting source said rice was now in high demand after sluggish trading in the first half of this year. Many countries have placed more orders with Thailand.

Exporters have to show attractive prices to win contracts from the government. Five top rice exporters have offered to buy rice from the Commerce Ministry, including Chaiyaporn, Phonglarb, CP Intertrade and Chia Meng. Their offers are quoted close to market prices. Now 5-per-cent white rice is trading at Bt13,000 a tonne and Pathum Thani rice at Bt17,000 a tonne.

Exporters may offer Bt600-700 less than the current market price, since they have to compensate |for depreciation and transport expenses.

Rice traders expect the government gradually to release about 3 million tonnes of rice to the market, and retain only 1 million to 2 million tonnes as a safety buffer. The government should obtain a good price, as it is a seller's market, the source said.

A senior ministry source said it would release its rice in steps to ensure a balance in supply and demand as well as to keep effects on the market price at a minimum.

Any exporter with an order in hand from a foreign buyer can make an offer to the Foreign Trade Department. The ministry will not hold an open auction for fear that a drop in the market price would hurt farmers, the source said.

According to the Thai Rice Exporters Association, Thailand exported 273,700 tonnes of rice from August 1-17 worth Bt4.88 billion. Exports in the first half of this year reached 4.9 million tonnes worth Bt95.17 billion.

Sompong Kittireanglarp, president of Phonglarb, said the company offered to buy more than 300,000 tonnes of rice from the government. Many export orders have been placed with the company from Africa, Singapore and Switzerland.

Source: The Nation