Thai rice tenders resume, bids just below the market

Thailand's government on Thursday opened its first tender for state-held rice since a military coup in May and was expected to sell all the 167,000 tonnes on offer at prices slightly below the market, exporters and a government official said. The government is estimated to hold up to 18 million tonnes of rice in its stockpiles - almost twice what it used to export each year - after a disastrous buying scheme under the previous government made the grain uncompetitive on world markets.
The military halted rice sales while it checked on how much grain was being held and what condition it was in. More than 40 rice exporters, millers and domestic retailers joined the tender at the Ministry of Commerce, said an official who declined to be named as he was not allowed to speak to the media.
Exporters who joined the tender said they had bid at around $5-$15 per tonne lower than market prices. "We have other costs to carry so we need to bid below the market, otherwise we can't compete on the world market," one exporter said, meaning costs such as getting the rice from state warehouses and perhaps blending it with newer, better grain.
The ministry declined comment on the bidding. It will submit the winning bids for approval by the army government and announce the results next week. The price of 5 percent Thai white rice stood at $440 per tonne on Thursday, slightly below the same grade from Vietnam at $465-$470 a tonne. Thai prices fell roughly 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 of its stocks to pay million of farmers who had been owed money for months for grain sold to the scheme.
Prices rallied from early June when the army stopped sales to carry out its inspection of stocks. The military government subsequently said only around 80 percent of the rice, about 14 million tonnes, was in good condition, while up to 20 percent was either rotten or missing. Opponents of former Prime Minister Yingluck Shinawatra alleged the rice scheme was riddled with corruption. That helped fuel months of street protests that undermined her government in the run-up to the army takeover.