Thai market report

Domestic and export prices surged to new highs due to lifting of capital control on Mar. 3, 2008.
Exporters based their quotations on 31 baht/$, compared to 32 baht/$ in the previous week. Every 1 baht/$ strengthening will normally cause $25/MT higher in quotations. Many exporters would not quote prices due to the volatility of the baht. Also, domestic prices increase by around $20- 30/MT, up 6 percent from the previous week. Thai exporters who will participate in the
Philippines tender next week (Mar. 11) are reportedly securing white rice supplies. They are
expected to get a portion of the tender of 550,000 tons (450,000 tons for 25% grade white rice,
50,000 tons for 15% grade white rice, and 50,000 tons for 5% grade white rice for shipment
between March - April this year), particularly for premium white rice, as Vietnamese rice supplies are also tight for the next few months in anticipation of possible rice crop damage. In addition, a sharp increase in domestic prices reflected aggressive speculative demand. The Government is reluctant to release intervention stocks as it argues that there is considerable paddy stock in private storage. Also, second crops in major growing areas in the central plain will be harvested gradually starting next week with anticipated total production of around 6.5 - 7.0 million tons of paddy, up slightly from the previous year following good weather conditions.