The government is expected to have trouble finding enough space to hold its rice stocks, as millers are complaining that their warehouses are already nearly full.

Manat Kitprasert, newly appointed president of the Thai Rice Mills Association, said 800 mills participating in the government's rice pledging scheme have very tight space now due to the massive flood of paddy from the previous season.

Participating millers now have combined capacity for only an additional 7 million tonnes of milled rice or about 10,000 tonnes each on average, he said.

However, some mills already have as many as 100,000 jute sacks of milled rice above their storage capacity. One jute sack contains 100 kilogrammes of rice.

"We've already sent a letter to the Commerce Ministry asking it to add more central warehouses, and the ministry has promised it will," he said.

"But there are lingering doubts as to whether it can do so in time, as the new harvest from the second crop is due in February and April. Without more central warehouses, we expect the mills will run out of space to keep the rice, and there's a danger of them turning away farmers in the scheme," he added.The Public Warehouse Organization said the government opened about 60 central warehouses nationwide for milled rice from the previous season, delivered from participating rice mills.

"Some rice in the pledging scheme has been released, but the amount is insignificant compared with what has entered the project," said Mr Manat.

Wanlop Pichpongsa, secretary-general of the Thai Rice Exporters Association, said he has learned that all the warehouses in the country are full but the state still cannot find enough space to hold 500,000 tonnes pledged from last year's second crop.

The enormous supply will definitely make an impact on the rice market this year, and international traders will have to see if Thailand can release these stockpiles into the global market without affecting prices.

The rice trading industry estimates the government now controls 11.5 million tonnes of milled rice bought through the government rice pledging scheme.

They are worried about how the government can tackle the estimated 12 million tonnes of milled rice from the new harvest this year.

The government recently vowed to sell 7 million tonnes of its stocks this year through government-to-government (G2G) deals amid lingering concerns among rice exporters that this would be impossible.

Vatchari Vimooktayon, the commerce permanent secretary, this month unveiled the ministry's latest rice mission _ selling 7 million tonnes on top of the 7.33 million tonnes that Commerce Minister Boonsong Teriyapirom announced earlier.

Last September, Mr Boonsong announced his ministry had concluded six G2G export deals, with Indonesia, the Philippines, China and Ivory Coast.

Source: Bangkok Post