The local rice industry is praising the Commerce Ministry's decision to unload more than 750,000 tonnes of rice from the state's huge stockpile for export and domestic needs.

It is the first rice sale by the Yingluck Shinawatra government, which has accrued more than 11 million tonnes of milled rice, converted from about 17 million tonnes of paddy the state has been pledged since last October.

"I view the bids as coming at the right time since supply in the market is very tight now," said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.

Thanks to attractive pledging prices of 15,000 baht a tonne for white rice and 20,000 baht for Hom Mali, farmers have been encouraged to sell all their rice to the programme.

Mr Chookiat said the rice release will give exporters enough supply to fill orders from abroad including 200,000 tonnes of parboiled rice for African countries, 70,000 tonnes of white rice for Iraq and some for Japan, which reportedly needs 250,000 tonnes of rice a year.

The decision by the Commerce Ministry, acting on behalf of the National Rice Policy Committee, to call bids for 753,855.67 tonnes of rice and paddy is considered an attempt to reduce pressure from the public.

Economists have blamed the state for spending too much on the pledging scheme while showing poor management of the enormous rice stock.

On Monday, the ministry's Foreign Trade Department announced it will sell 210,660.9 tonnes of 5% white rice for export as well as 499,068.51 tonnes of second-grade 100% Hom Mali rice, Pathum Thani rice, fragrant rice varieties and A1 special broken rice.

It will sell an additional 44,126.26 tonnes of Hom Mali paddy, local fragrant paddy and 5% white paddy kept since 2005.

Chanchai Rakthananon, president of the Thai Rice Millers Association, expects many bagged rice makers to join the bids, as rice is badly needed in the domestic market.

"The government should gradually unload rice to prevent any effect on local rice prices," he said.

The price of milled rice this week rose to 18 baht a kilogramme from 16 baht last week and to 32 baht/kg for Hom Mali from 30 baht.

Mr Chookiat, however, remains unconvinced that the rice release will have much impact on market prices.

The Thai export price is now US$560 a tonne ($580-590 for parboiled rice).

Rice prices will rise after severe drought hit crops in foreign countries but will not surge substantially as in 2008, said Mr Chookiat.

Source: Bangkok Post