The Public Warehouse Organisation is confident it can sell rice to Indonesia after buyers could not obtain orders from Vietnam and India, says Pol Maj Sarawut Sakulmeerit, PWO's director.

Despite the higher price of Thai rice, the Indonesian government seems to be confident in Thailand's logistics because Indonesia is still eager to secure a large volume to serve domestic consumption and distribution.

New deals with Indonesia would be welcome as Thai rice exports this year are down 50% in volume from a year ago because of price competition.

"It's good news for the Thai rice trade, but there is no certainty about the amount," said Pol Maj Sarawut, who visited Indonesia last week.

He said The Food Hall, a major Indonesian retailer with branches nationwide, was interested in buying a large volume of packed Hom Mali rice from Thailand to distribute to premium customers.

Thai Hom Mali rice is popular among affluent consumers in Indonesia, but the Jakarta government has barred its import from Thailand to protect local farmers.

After determining demand, the PWO will ask the commerce minister to pursue negotiations with the Indonesian government to allow the import of Thai packed fragrant rice.

Last year Indonesia was the second-largest importer of Thai rice, taking in 914,918 tonnes, behind only Nigeria.

Thailand exported 439,586 tonnes of rice worth 9.55 billion baht in January, a year-on-year drop of 51.2% in terms of volume and 42.1% in value, said the Thai Rice Exporters Association (TREA). The average export price rose by 10.5% year-on-year to US$663 a tonne.

Indonesia was the largest importer during the month, taking in 106,064 tonnes, followed by Japan at 34,437 tonnes and Singapore at 32,929 tonnes.

TREA expects to ship higher volumes this month. As of Feb 14, the country had exported about 400,000 tonnes, compared with 673,239 tonnes shipped in all of February last year.

Since the start of the year, shipments total 788,016 tonnes, a 50% drop from the same period of 2011.

A stagnant market may continue as more importers buy from India, Vietnam and Pakistan, all of which offer cheaper prices, said the association. India is quoting $445-455 a tonne for white rice, Pakistan $435-445 and Vietnam $415-425, far lower than Thailand's $563.

Parboiled rice from Thai exporters is also pricier than that of its rivals, at an average of $569 a tonne compared to $435-445 offered by India and Pakistan.

Pol Maj Sarawut said the PWO also offered to sell Thai red onions at 15 baht a kilogramme plus a management fee to Indonesia. That price is equal to the purchase price set by the government under its scheme to shore up prices, which have plunged to seven to nine baht a kilogramme.

Thailand is forecast to produce 84,000 tonnes of red onions this year.

Source: Bangkok post