The government intends to reduce the volume of rice in domestic stockpiles to only 100,000 tonnes of white rice, which is already double the reserve for national food security, according to Deputy Prime Minister Trairong Suwankhiri.

The country currently has a stockpile of one million tonnes of white rice and the government plans to sell 900,000 tonnes.

Mr Trairong said only 50,000 tonnes of rice were sufficient as a reserve, and authorities were not worried about lowering the stockpile since the new paddy harvest will start soon.

The first crop of domestic paddy is projected at 22.17 million tonnes and the second crop at 9.15 million. Thailand is likely to export 10.73 million tonnes of the 2010-11 crop, up slightly from 10 million for 2009-10.

Dr Trairong said several countries had inquired about buying up to 1.4 million tonnes of rice, including Nigeria and Indonesia at 500,000 tonnes each, and Malaysia and Brunei at 200,000 tonnes each.

With only one million tonnes left in the government's stocks, world rice prices have increased.
The Thai Rice Exporters Association yesterday set its Asian benchmark price at a one-month high of $558 a tonne for 100% grade-B white rice. The price has risen 4.5% since Dec 29.

"I told the cabinet that the government shouldn't buy rice as massive stockpiles pressure the world price and the government has the burden to keep the stock," he said.

Each year, global rice trading volume is around 30 million tonnes so Thailand's previous stockpile of 5 million tonnes was quite high.

He insisted that the 4 million tonnes released at average prices between 13,000 and 14,000 baht per tonne were only 16% below market price, while previous governments sold rice at 33% below prevailing rates.

Source: Bangkok Post