The stockpile's release will afford the ministry more space for the new rice crop soon to enter the market.

Rachane Potjanasuntorn, director-general of the ministry's Foreign Trade Department, said yesterday that the bidding was aimed at responding to the present high market demand while prices are up.

"We monitor the market closely. The supply is low now, so that's why we must release the rice stocks, to smooth the market mechanism," he said.

Of the bidding volume, 300,000 tonnes is jasmine rice from the 2004-05 harvest. This batch will be offered to domestic traders, who will be allowed to quote "freight on board" in baht. The remaining 120,000 tonnes is earmarked for exporters, and bids in US dollars will be required. The minimum quantity for each bid is 2,000 tonnes.

A ministry report shows jasmine rice is currently exported for US$490 (Bt18,800) per tonne, while the domestic price is Bt17,000 per tonne.

Thai Rice Exporters' Association president Chookiat Ophaswongse called the government's stockpile release "urgent" and said it was in preparation for the new rice-crop intervention programme.

"The government doesn't have enough space to store the new crop, so the bidding will facilitate intervention management," he said.

Chookiat pointed out that the government had about 2 million tonnes of jasmine rice stored. It would take one and a half years to use up such a huge stockpile.

Petchanet Pratruangkrai

The Nation