The government has yet to sell 375,000 tonnes of rice from its stocks after a tender held last week as it believes the bids offered by exporters are unacceptably low.

Commerce Minister Porntiva Nakasai has directed the Foreign Trade Department to renegotiate with rice exporters for higher prices, particularly for glutinous rice, as the prices offered were well below prevailing market rates.

"There are some indications in the market that prices could rise further given higher demand prospects and because world rice production is expected to fall because of natural disasters, so we need to negotiate better prices," Mrs Porntiva said yesterday.

The government opened bids last week to sell 375,000 tonnes from its rice stocks, drawing offers from 22 companies for far more than the amount available.

Bidders proposed offers for a total of 489,308 tonnes, with 5% white rice making up 246,206 tonnes and glutinous rice the rest. 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.The market price for white rice is being quoted at 16,900 to 17,000 baht a tonne, with the price for glutinous rice as high as 22,000 to 22,100 baht a tonne.

The previous government bought paddy from farmers under the price-pledging programme at 14,000 baht per tonne during the 2008 season. That translates into milled rice prices at 23,000 to 24,000 baht per tonne. The pledged paddy price for 2009 was 12,000 baht, putting milled rice at 21,000 to 22,000 baht a tonne.

Officials met the bidders last Friday to negotiate the final prices to be proposed to Mrs Porntiva for approval on Monday for submission to the cabinet yesterday. But no recommendation was made to the cabinet pending further talks.

Vichak Visetnoi, director-general of the Foreign Trade Department, said a negotiating panel had so far succeeded in securing increases of 200 to 600 baht per tonne above the exporters' original bids, but senior Commerce Ministry officials overseeing the sale were still not happy.

Mrs Porntiva said earlier that the government might recall the bids, particularly for glutinous rice, if the prices offered were too far below market prices.

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

Source: Bangkok Post