Thialand to lower rice stockpiles

The government plans to sell up to 500,000 tonnes of rice from its stocks by the end of next month, according to Commerce Minister Porntiva Nakasai.

The government wants to lower its stockpiles to avoid pressure on rice prices when the new crop comes onto the market next month, said Mrs Porntiva, who chaired a meeting of the sub-committee that handles the sales on Friday.

According to Mrs Porntiva, the government is preparing to intervene in the market to buy as much as 2 million tonnes of paddy if the new output prices falls below the market prices.

The committee agreed to sell between 400,000 and 500,000 tonnes of the grain. However, the final decision would rest with the National Rice Policy Committee, to be chaired by Prime Minister Abhisit Vejjajiva next week after he returns from the United States.

In a related development, the government said it would open a tender on Monday to sell 337,560 tonnes of rice under a new bidding system through the Agricultural Futures Exchange of Thailand (AFET).

The tender would cover 44,137 tonnes of premium grade fragrant rice and 293,423 tonnes of 5% white rice.

About 650,000 tonnes of rice have been sold through the AFET this year.

Under the tender through the futures exchange, successful bidders would not get their rice immediately from government warehouses. They will have to buy contracts on the AFET and wait for delivery on the maturity date.

The government currently has about 6-7 million tonnes of rice in its inventory.

Mrs Porntiva said the National Rice Policy Committee would also be asked to extend the rice pledging scheme for second-crop paddy in southern provinces until Oct 31 from the earlier Sept 30.