Eight exporters took part in the bidding, with the highest price of $435 offered by CP Intertrade. The lowest offer was $360, from Thai Ha Co Ltd, a new exporter.

Commerce Ministry permanent secretary Karun Kittisataporn said the ministry was not satisfied with the offered prices, and would try to persuade bidders to go higher.

However, the bidders may ignore the ministry's entreaties because they can buy rice from the market at lower prices.

"If we are not satisfied after bargaining with the bidders, the bidding will collapse," Karun said.

A final decision is expected within two days from Commerce Minister Somkid Jatusripitak.

The ministry hoped to sell 200,826 tonnes of jasmine rice yesterday, from the government's rice-pledging programme in the harvest season of 2004-2005.

However, as well as offering low prices, the bidders wanted a total of only 70,618 tonnes.

Rice traders hold the belief that the world market for jasmine rice is at a peak and tending to decline. As a result, they offered lower prices to avoid export risks.

Under the rice-pledging programme, the government's stockpile of jasmine rice cost it $275, or Bt11,000, per tonne last year when the exchange rate was Bt40 per dollar. However, this year's market price for jasmine rice is $257, or Bt10,000, per tonne at the current exchange rate of Bt38.80 per dollar.

Exporters say they have time to wait for new crops that will bring the market price down further.

CP Intertrade president Sumeth Laomoraphorn said his company's offer was in accordance with world market prices. In addition, exporters face high costs, especially for transportation and quality adjustment because the government's rice stock is old.

He said his company estimated that bidders would have to spend $30 per tonne for additional costs. The stronger baht is another important factor behind yesterday's low offers.

Petchanet Pratruangkrai

The Nation