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.