| Thailand to sell rice from stocks, prices may fall |
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BANGKOK, April 21- Thailand, the world's biggest rice exporter, plans to open a tender in the next two weeks to sell 3.76 million tonnes of the grain from its stocks, the country's commerce minister said on Tuesday. Exporters said they feared the move could push Thai rice prices down 10 percent over the next few weeks. Around 3 million tonnes would be sold through a tender, for export only, while another 760,000 tonnes would be sold on the Agriculture Futures Exchange of Thailand (AFET), Commerce Minister Porntiva Nakasai said. "We have to release the stocks as the government wants to cut storage costs of up to 137 million baht per month," she told reporters, adding the exact tender date had not yet been set. The Thai currency figure is equivalent to $3.9 million. Porntiva said the government also wanted to sell some of its stock quickly as it feared prices would drop further if India lifted a ban on rice exports imposed in October 2007 when it was concerned about domestic supplies. The ban helped push world prices to record highs last year. India, which vies with Vietnam as the world's second biggest rice exporter, has allowed the export of up to 15,000 tonnes of non-basmati rice to Nepal and was likely to lift a rice export ban after its general elections in May. The government is likely to suffer a big loss on its rice, which it bought at elevated prices to help farmers. It paid farmers 12,000 baht ($338) per tonne for paddy during an intervention scheme that ended in February, which would give a price of around $600 per tonne for milled rice for export, well above current market prices of around $550 per tonne. The government was estimated to hold another 2 million tonnes of rice it bought from farmers in the latest intervention scheme, starting in mid-March, said a Commerce Ministry official. Under this new scheme, the intervention price is only marginally lower at 11,800 baht per tonne for paddy. Thailand exported 10 million tonnes of rice in 2008 and is expected to export 8 million tonnes this year. DEPRESSING PRICES The Thai Rice Exporters Association said prices could fall around 10 percent over the next few weeks because of the government sale, at a time when demand is weak. "That amount of 3.76 million tonnes is too big and will definitely depress prices as supply is flooding the market," said Chookiat Ophaswongse, president of the association. Traders elsewhere agreed. "If they have to sell such large quantities within two weeks, it will surely drag down prices. Thailand is most expensive at the moment and the impact of this sale will be good for buyers," said a manager with a Singapore-based trading house. Demand now was thin, and the price of benchmark Thai 100 percent B grade white rice RI-THWHB-P1 would drop further to around $500 per tonne, he said. The benchmark rice was quoted at $550 per tonne on Tuesday, unchanged from last week. However, another trader in Singapore said price falls could be limited. "There's not much being offered from Vietnam, and India is still out of the market, so any downward move in prices will be limited as supplies are a bit tight," the trader said. ($1=35.54 Baht) |
Kumaran Maridas