'RI to buy 200,000 tons of Thai rice'

'RI to buy 200,000 tons of Thai rice'

Dow Jones, Bangkok

Indonesia has agreed in principle to buy 200,000 metric tons
of rice from Thailand, Commerce Ministry spokesman Rachane
Potjanasuntorn said Monday.

The decision was made at a meeting in Bangkok Friday between
Thailand's Commerce Minister, Adisai Bodharamik, and Indonesian
Trade Minister Rini Soewandi, Rachane said.

The rice will be mostly 25 percent broken grade, with some
possibly 5 percent broken, Rachane said.

The responsible agencies of the two countries will later
discuss the price and exact delivery period of the rice, Rachane
said, adding that the rice will be shipped promptly after the
price is agreed on.

Thai 25 percent broken rice is offered in the market around
US$177-$180 a ton, FOB Bangkok.

Thailand will sell the rice to Indonesia on a government-to-
government basis under a payment method called an "account trade"
facility, Rachane said.

Under such a system, cash is used only to cover the difference
in the value of products bartered between countries.

The Thai government will supply Indonesia with rice it has
been accumulating under its current rice price intervention
program, Rachane said. At the end of last month, the government
had around 4 million tons of intervention rice paddy, he said.

Rachane said Indonesia is expected to buy at least 500,000
tons of Thai rice this year due to expected lower rice output.

Excessive rain in Indonesia and an expected recurrence of the
drought-inducing El Nino weather phenomenon "could stand in the
way of the ambitious target of 53.9 million tons (of paddy) set
by the (Indonesian) government for 2002 against the 50.1 million
tons of output in 2001," the United Nation's Food and Agriculture
Organization, or FAO, said in its Rice Market Monitor released
Feb. 22.

Thailand, the world's largest rice exporter, exported 446,972
tons of rice to Indonesia in 2001, on a private basis.