Thirty millers, rice packers and exporters participated in the Commerce Ministry's auction yesterday for purchase of 753,000 tonnes of rice, higher than expected as the outlook for rice export during the rest of the year has improved.

Some bidders The Nation talked to said they had offered Bt16,500-Bt17,000 per tonne for 5-per-cent white rice, compared with the current market price of Bt16,900-Bt17,450. However, the government's cost from the rice-pledging scheme was Bt18,000-Bt19,000 per tonne.

An official source said the government would accept Bt17,000 a tonne.

The bidders comprised major rice exporters and traders, including Capital Rice, Asia Golden Rice, CP Intertrade, Chia Meng, Ponglarb and Chaiyaporn. Siam Indiga, the Kingdom's third-largest rice exporter, has proposed to buy the whole lot of 210,000 tonnes of 5-per-cent white rice.

For jasmine rice, the government has targeted a price not lower than Bt30,000 a tonne, compared with the current market price of Bt32,500 and the pledging cost of Bt26,000-Bt27,000 a tonne.

The Commerce Ministry yesterday opened bidding for a total of 753,000 tonnes of rice to local rice traders and exporters from 9am to 4.30pm.

This lot of rice comes from the main crop. On the block is 499,000 tonnes of provincial fragrant rice, Pathum Thani rice and white broken rice, and about 210,000 tonnes of 5-per-cent white rice. The remaining 44,126 tonnes is jasmine paddy rice, fragrant paddy rice, and 5-per-cent paddy white rice from old harvest seasons since 2005-08.

As of yesterday, the market price for 5-per-cent white rice was Bt17,450 a tonne, while jasmine rice was traded at Bt32,500 a tonne.

Akarapong Dipavajra, director of the Rice Trade Administration Bureau under the Foreign Trade Department, said the ministry would start to bargain for the best prices by Friday.

However, he said that if any bidders proposed a price much lower than the market price, the ministry would ignore their bid.

The auction result will be considered by the working committee on rice bidding, which is chaired by Foreign Trade Department director-general Manus Soiploy, while the final decision will be agreed by Commerce Minister Boonsong Teriyaphirom. It could take a few days to bargain with potential winners.

The consideration will be based on previous market prices and demand in the market. At present, the market for white rice has been on the rise thanks to higher demand for Thai rice, particularly from Iraq, which has ordered 560,000 tonnes of 5-per-cent white rice.

Akarapong said the sale price would be based on minimum losses to the government and minimal impact on the market price.

A senior source from the department said that if any bids were 10 per cent lower or higher than market, the government would release stocks to those bidders.

According to the Thai Rice Exporters Association, rice shipments dropped by 45.74 per cent year on year to 4.21 million tonnes in the period between January 1 and August 17.

Source: The Nation