RI rice order boosts Thai market

RI rice order boosts Thai market

BANGKOK (Reuters): Indonesia's purchase of 300,000 tons of Thai rice has cheered the local market amid expectations of further orders, trade sources said Thursday.

They estimated that Indonesia was likely to import between 1.5 million and 2.0 million tons of rice from various sources between now and early 1998 to make up for a local shortfall due to effects of the El Nio weather phenomenon.

Local rice prices surged due to higher overall demand in the market but export prices edged up only slightly owing to the cheaper baht.

Thai benchmark 100 percent B grade was quoted around $270-275 per ton FOB Bangkok while the 100 fragrant grade was quoted at $650-670 on the same basis, traders said.

"Thai rice is likely to get a big share out of that. I think a fear that the financial crisis in Indonesia will force the country to sideline Thailand and turn to lower end markets is unfounded," a local exporter told Reuters.

"If the price is not that different, Thai rice would be a preferred choice as Indonesians like our consistency and punctuality in delivery," he said.

Indonesia was said to have bought 300,000 ton of 15-20 percent grade rice from Thailand for nearby shipments. Traders said loading had already begun.

A senior Indonesian official said the El Nio induced drought was expected to cut this year's domestic unhusked rice production by 3.9 percent from 1996's output of 51.3 million tons.

Meanwhile, trade and government sources said Thailand was edging closer towards sealing a deal to sell 100,000 tons of rice to the Philippines.

"The deal will be on a government-to-government basis. I heard they are still negotiating on prices but many expect it to come through," said a trader with a major rice firm.

According to trade sources, the Philippines has bought 150,000 tons from Vietnam, 50,000 tons from India, 100,000 tons from China and 75,000 tons from Malaysia.

Regular buyers such as Nigeria and other Asian countries also entered the market this week, traders said.

Thailand has exported around 4.44 million tons of rice between Jan. 1-Nov. 25 this year compared with 4.67 million tons during the same period last year.

Of the total, 4.19 million tons were traded through the private sector while the rest went through the government channel, according to trade sources.