Thai rice futures ended flat for a second straight session on Tuesday, but sentiment remains strong, boosted by fresh export demand and a state buying scheme, brokers said. Overall volume was barely changed as 69 contracts of 5 percent white rice were traded compared to Monday's 67. The most active May contract settled steady at 10.54 baht per kg on Tuesday, with the number of contacts traded rising to 53 from 21.
"Players bought contracts on expectations that prices would rise further," said one broker.
There was talk in the market that shipping was getting busy with several vessels nominated to ship rice out of Thailand later this month, brokers said.
Prices would also be supported by the government's announcement last Friday that it will buy rice from a second crop due to hit the market in April.
"The announcement has lent strong support to futures prices. They could be supported, or at least not fall lower than the intervention price level," said one broker.
The government said the intervention price for the second crop would be the same as for the main crop.
It is paying 6,500 baht per tonne for 5 percent broken paddy grade from the main crop under the current scheme due to end on March 31.
On the physical front, Thai 5 percent white rice was up 0.10 baht per kg to 10.60 baht per kg on Tuesday.
The Agricultural Futures Exchange of Thailand is studying whether to introduce another type of rice, the parboiled grade, to be traded on the exchange, possibly in August in an attempt to boost trading volume, brokers said.
Brokers said they would welcome the product because it would help attract more investors, especially foreign players.
Producers of parboiled rice are Thailand, India and South American countries, while Thailand, India and Uruguay export it.
Thailand, along with India, is a leading exporter of parboiled rice, shipping close to 3 million tonnes a year to its key markets, which include Nigeria, southern Africa and the Middle East.
Thailand, the world's biggest rice producer and exporter, launched its rice futures trade in August and plans to start trading in tapioca starch futures on March 25.