Thailand Rice trading schemes pushed forward

The government is preparing to buy paddy from farmers starting early
next month and will accelerate sales from its huge rice stocks through
government-to-government contracts to stabilise prices, according to
Commerce Minister Porntiva Nakasai.

She said the ministry would start buying paddy for the 2009-10 main crop
from Nov 2, initially in Phitsanulok, Kamphaeng Phet and Nonthaburi,
using 20 billion baht from the Thai Khem Kaeng economic stimulus budget.

Buying prices would be based on the government's reference prices set at
8,460 baht per tonne for paddy with 15% moisture.

In light of heavy rains during the last several weeks, local paddy
prices have fallen to between 6,000 and 6,500 baht for paddy with
moisture exceeding 30%.

However, exporters said the overall Thai rice prices were not all that
bad, with the benchmark Thai white rice now around 14,800 baht per tonne
free-on-board, or about 8,400 to 8,500 baht per tonne for paddy of 15%
moisture.

According to Mrs Porntiva, the government plans to sell 950,000 tonnes
of rice from its stocks through government-to-government deals in the
remaining two months of this year and would release another 1.77 million
tonnes in 2010. "Our strategy is to drain rice out of the country in a
bid to lift domestic prices during the harvesting season," she said.

The government is estimated to have the equivalent of six million tonnes
of milled rice, bought from farmers in previous price intervention
schemes. "We plan to negotiate with several countries, including the
Philippines, Malaysia, Indonesia and Iran," said Mrs Porntiva.

On Monday, the Philippines said it was in talks to buy at least 250,000
tonnes of rice from Thailand in a government-to-government deal.

Thailand was expected to produce around 23.5 million tonnes of rice from
its main crop.

The government had planned to end its rice-buying intervention in favour
of a scheme under which it would subsidise farmers without buying grain
itself. However, it has been forced to run both schemes in parallel in
the face of farmers' protests.

Mrs Porntiva said to lift rice exports next year, the government planned
closer partnerships with private exporters to negotiate with potential
buyers including Nigeria, Angola, Libya and Algeria. As of Oct 26,
Thailand had exported 7.065 million tonnes of rice worth $4.06 billion.
Volume was down 20.7% with value dropping 25.9% from the same period
last year.