Cheaper vn rice delays stockpile bidding plan

The Commerce Ministry has delayed the plan to open bidding for 2 million tonnes of stockpiled rice, due to Vietnam recently having dumped stock onto the market at a cheap price.

At the weekend, the Vietnamese government announced the export of 400,000 tonnes of 5-per-cent white rice at less than US$400 (Bt13,906) per tonne. This is considerably below the market price of $650-$670 per tonne.

"Rice traders and exporters were shocked by such a low price. As a result, Thailand has to delay the bidding for a while, waiting until Vietnam runs out of stock," Commerce Minister Chaiya Sasomsap said yesterday.

Chaiya said the authorities would have to take Vietnam's export price into consideration in revising the Kingdom's rice price.

The government will lower its targeted prices in order to maintain export competitiveness. However, the prices will not be as low as for Vietnamese rice as Thai rice is regarded as being of higher quality, he said.

The Commerce Ministry is not unduly worried about the release of stock by the Vietnamese, as the quantity involved is relatively limited. The main Vietnamese crop will not enter the market until next month.

The ministry will seek Cabinet approval today to set up a subcommittee to release the government rice stockpile, which totals 4.4 million tonnes of jasmine rice, white rice and sticky rice.

As part of the plan to sell the stockpile, a Foreign Trade Department mission will visit Iran next month to pursuing barter-trade deals involving rice and oil.

Vichai Sriprasert, president of Riceland, said the government was on the verge of dropping prices due to the downward market trend. Rice exporters who cannot offer attractive prices will lose business opportunities, he said.

"Vietnam is a good example. Although the country offers an export price lower than $400 per tonne, it has not taken any orders," he said.

Vichai added that buyers and importers had foreseen the declining trend in global rice-price, in line with other commodity prices. Rice prices will drop through to the end of the year, before increasing again early next year.

He suggested two options to the government: accelerating the release of some of the rice stock, and delaying exports for months in anticipation of better prices.