Thai Rice weekly report

Despite a steady decline in domestic prices, export prices increased
slightly by $1-2/MT due to the strengthening Thai baht to 33.5 baht/$,
as compared to an average of 33.8 baht/$ in recent weeks. Fluctuating
exchange rates have caused some exporters to be more cautious in their
quotations. Domestic prices remain under downward pressure in
anticipation of increasing exportable supplies from new MY2009/10
main-crop harvest and the government stock release expected next month.
The Government is planning a gradual release of old-crop intervention
stocks of 1-2 million tons (out of the total stocks of approximately 6-7
million tons), which will be proposed to the National Rice Policy
Committee in the coming weeks.
As for the stock tenders based on basis-bidding approach, the Government
finalized its retender on September 7, 2009 to release 198,510 tons
(9,420 tons for fragrant rice, and 189,090 tons for white rice). The
bidding prices were mostly below expected AFET futures prices of October
– December 2009 (-1.97 baht/kg for fragrant rice, and -0.3 baht/kg for
white rice). The total release from these tenders (Aug. 6 and 26, and
Sep. 7) was 663,270 tons of which 299,962 tons were fragrant rice and
the balance was white rice.