'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.