Indonesia orders 500,000 tons of Thai rice

Indonesia orders 500,000 tons of Thai rice

BANGKOK (DPA): Thailand has agreed to export 500,000 tons of rice to Indonesia between September this year and January 1999 for close to 6 billion baht (US$143 million), news reports said Saturday.

The rice sale was agreed on Friday between Thai Commerce Minister Supachai Panichpakdi and visiting Indonesian State Minister for Food and Horticulture Ahmed Musih Saefuddin and the purchase agreement was scheduled to be signed Saturday, said the Bangkok Post newspaper.

Under the arrangement Indonesia will purchase 400,000 tons of rice on three years' credit and pay for the remaining 100,000 tons in cash.

The agreed price for the rice was $280-282 per ton, said the newspaper citing "sources close to the deal."

Under the purchase agreement the Central Bank of Indonesia will guarantee letters of credit from Indonesian banks acceptable to Thailand.

Supachai, who is also deputy prime minister, said he was confident Indonesia would be able to pay for the rice as Jakarta had obtained financial assistance from the International Monetary Fund (IMF) and Japan.

Thailand's rice exports in the first seven months of 1998 reached 3.81 million tons, a 38 per cent rise over the same period last year, thanks to growing world demand and the problems faced by other rice exporters.

In the January-July period Thai rice exports earned the country 52.5 billion baht ($1.2 billion), an 82 per cent increase over last year's baht earnings for the same period and an 11 per cent hike in dollar terms, said Supachai.

Devastating floods in China have wrecked paddy land and forced a slowdown in exports this year, while in communist Vietnam the government has placed limits on its rice exports to assure local self-sufficiency.

And India and Pakistan, usually major rice exporters, have low levels of rice stocks.

Thailand, the world's leading rice exporter for decades, expects to ship an average of 450,000-500,000 tons of rice per month in the third quarter of this year, said the commerce minister.