The government is preparing to sell 150,000 tonnes of its rice stocks through the Agricultural Futures Exchange of Thailand (AFET), starting from Aug 15, which is the first batch of 1 million tonnes it hopes to sell through the local futures market this year.

Yanyong Phuangrach, deputy commerce minister, said this would be AFET's first sale since 2009. Some 50,000 tonnes would be of Hom Mali Rice 100% Grade B, with the remaining 100,000 tonnes slated for 5% white rice.

Interested bidders can ask for permits to inspect the rice quality from Aug 9-13, with terms of reference due to be issued over the next few days.

Mr Yanyong said for rice sales through AFET the private sector bidder offering the best price would be chosen by a subcommittee handling the government's rice stock sales, chaired by director-general of the Internal Trade Department, before submission to the commerce minister for further approval.

The government is set to scrap the sale if the bid prices are considered to be too low.

However, Mr Yanyong insisted AFET will be a key channel for the government to dispose of its rice stock, adding it is expected to attract interested buyers given the small lots of only about 2,000 tonnes allocated. He admitted the government's existing rice auctions for relatively large amounts don't have enough bidders as the private sector is wary of the rice quality.

The government announced on July 15 it would put up 550,000 tonnes of rice for auction, with 5% white rice slated for export making up 150,000 tonnes and broken rice for export and local use making up 200,000 tonnes.

The other 200,000 tonnes will be sold as paddy to be processed as parboiled rice for export.

But the government managed to sell only 210,000 tonnes in all _ 60,000 tonnes of white rice, 30,000 tonnes of broken rice and 120,000 tonnes of parboiled rice.

New auctions are planned for 200,000 tonnes of white rice, broken rice and jasmine rice this week.

The AFET said in July it expects the government's plan to release pledged rice through the market will create at least 50,000 trading contracts for every 1 million tonnes of rice tendered through auctions for the six-month period.

Acting president Sakda Thongpalad said the market's rice trading volume will rise by almost 10,000 contracts, with 15 tonnes per contract per month.

Source: Bangkok Post