Thai rice prices rose on Thursday as export-quality supplies remained tight despite the sale of rice from government stockpiles this week, traders said. Thai 100 percent fragrant rice was quoted at $508 per tonne, free on board, up from last week's $499 a tonne.
"That did not seem to help," one exporter said of the 305,554 tonnes of stockpiled fragrant rice sold to traders on Tuesday. The rice, bought during the 2004/05-crop year to prop up prices for farmers, would likely be sold domestically because the quality did not suite foreigners who prefer less mature rice. "We all know the rice was old and suited Thai tastes.
Most of it will be sold in the country," the exporter said. At Tuesday's auction the government failed to sell 120,000 tonnes of newer 2005/06 rice which was offered for export only. Strong demand from traditional buyers in Hong Kong, Singapore and China would keep supplies of export-quality Thai fragrant rice tight, traders said.
They estimate the government is still holding about 500,000 tonnes of rice bought from farmers under the intervention scheme. Thai 100 percent B grade rice was offered at $320 per tonne, free on board, on Thursday, up from $317 per tonne last week due to demand for shipments to Iran and Iraq.