Bangkok Nov 12 - Thailand, the world's biggest rice exporter, could sell 2.5 million tonnes from its stockpile this week, the commerce minister said on Tuesday, in a move that would swell supplies and squeeze export prices even further.
The government had offered 3.1 million tonnes of rice in a tender on Nov. 5, but exporters had doubted it would find buyers at an acceptable price.
"We're quite satisfied with prices and I think we would agree to sell 2.5 million tonnes by this week," Commerce Minister Chaiya Sasomsab told Reuters, adding that fragrant rice and 5 percent white rice would be the products on offer.
Exporters had bid around 16,000 baht ($458) per tonne for fragrant rice and around 10,000 baht ($286) per tonne for 5 percent white rice, Chaiya said.
"The government is not expected to make any losses if we sell at these prices," he added.
The rice was bought as part of government intervention programmes, at prices ranging from 6,000 to 9,000 baht per tonne, unmilled. The rice sold in the tender is milled.
Chaiya said the government would not sell rice bought during the latest 2008 scheme, when it paid 14,000 baht per tonne, as it did not want losses.
Exporters have said that would equate to an export price for milled rice of about $700 per tonne.
Last week exporters quoted $550 per tonne for benchmark 100 percent B grade white rice, about half the record high of $1,080 hit in April.
The fragrant rice can be sold domestically, but the white rice was for export only, Chaiya said.
PRICES TO FALL FURTHER
Thai rice prices are expected to fall further over the next few weeks as demand remains thin, traders said. It is also the start of Thailand's main harvest, and around 23.8 million tonnes of paddy is expected to hit the market this month.
"Exporters are keen to sell as they can buy rice at low prices from the government, but right now I don't see any buyers. Demand is very weak," one trader said.
However, exporters might buy in a bid to build up stocks, ready to sell early next year, they said.
"Demand for Thai rice should pick up again in January and February when Vietnam doesn't have rice to sell," another trader said, adding that Vietnam would start harvesting rice again in March.
Vietnam, the world's second biggest exporter after Thailand, was likely to halt rice exports in January and February after grabbing market share in November and December due to cheaper prices, traders said.
Vietnam was expected to sell more than 1 million tonnes of rice in the last two month of the year, according to its prime minister, Nguyen Tan Dung.
Thai rice exports have fallen significantly as buyers switched to produce from Vietnam, traders said.
Thai exports in October totalled 620,000 tonnes, or half of the figure of 1.2 million tonnes in the same month last year.
From January to early November, Thailand exported 9.1 million tonnes of rice, up 20 percent from the previous year when it sold 7.5 million tonnes, Commerce Ministry data show.
Thailand aimed to sell up to 10 million tonnes in 2008, up from 9.5 million tonnes last year. ($1=34.88 baht)