Thai military government approves first rice sale

BANGKOK - Thailand's military government approved the sale of 73,000 tonnes of rice from government stocks in its first successful sale since the army seized power in May, less than the 167,000 tonnes it aimed to sell in a tender last week.

The sale of rice, worth more than 737 million baht (S$28.8), from state warehouses to rice exporters, millers and domestic retailers follows a failure to shift any grain last week, in the military's first tender since it took control.

Duangporn Rodphaya, director-general of the Foreign Trade Department at the Commerce Ministry, which oversees rice stock sales, said 12 private companies were successful out of 36 bidders.

The sale was approved on Thursday, the commerce ministry said in a statement. It did not reveal the sale price and said that doing so could affect the next rice stock auction. "The tender price this time was close to the market price,"a government official at the commerce ministry said.

The price of common grade Thai 5-percent broken rice was steady at $440 per tonne on Friday, slightly below the same grade from Vietnam at $450-$455 a tonne.

In its first tender last week, offers were below the government's expectations, and the sale was halted by the state, which did not disclose a minimum floor price.

Thailand is estimated to hold up to 18 million tonnes of rice in state stockpiles, almost twice what it used to export each year.

The Southeast Asian nation has mammoth stockpiles of rice after the previous government bought rice from farmers at prices well above market levels for the staple grain.

The army, which seized power in a bloodless coup in May, made the repayment of farmers who were owed money under the controversial scheme one of its priorities.

It also halted rice sales while it inspected warehouses to check how much grain was being held and in what conditions.

Duangporn said the next round of bidding would take place soon and that floor price assessments would be amended in order to speed up sales. "We will amend the way we assess minimum floor prices to speed up the decision-making process and will take into consideration the domestic and international rice trade situation," Duangporn said.

Thai rice prices fell around 20 percent in the first half of the year to a low of $370 a tonne as the previous government was forced to offload some stocks to pay millions of farmers who had been owed money for months under the scheme.

Prices rebounded in June after the military government halted sales and called for a nationwide stock inspection.