In a bid to reduce the government's huge rice stockpile, the Commerce Ministry will next Monday open bidding for 300,000 tonnes of white rice on the Agricultural Futures Exchange of Thailand (Afet).

It will be the second bidding for 5-per-cent white rice after the government launched its first bidding in April.

The government has remaining stock of more than 1.8 million tonnes of white rice and one million tonnes of jasmine rice.

The Foreign Trade Department will soon open bidding for 394,000 tonnes of 5-per-cent white rice from the 2004-05 and 2005-06 harvest seasons. The current market price is Bt1,020 to Bt1,025 per 100-kilogram sack.

Public Warehouse Organisation president Pisut Chalakornkul said the government would adjust some conditions for the second bidding on the Afet in an attempt to reduce stocks more quickly and attract more bidders.

For instance, the ministry will shorten the period for winning bidders to carry rice out of the government's warehouses from 40 to 30 days.

After the first bidding, only 40 per cent of the rice could be removed from warehouses.

Pisut said the change of some conditions would draw more bidders and create a competitive environment. "New bidding conditions will allow the government to gain better prices," he said.

The ministry offered 33,098 tonnes of white rice from the 2005-06 harvest season on the Afet last month. However, the offered prices were lower than market prices.

A rice-trader source said bidding on the Afet was not a successful way to reduce government stocks due to many conditions and costs to bidders, such as entrance fees and restrictions on carrying rice out of warehouses.

"Most rice traders prefer ordinary bidding," the source said.

Petchanet Pratruangkrai

The Nation