Thai rice supplies tight, but N. Korea interested

Thai rice supplies tight, but N. Korea interested

BANGKOK (Reuters): Asian rice prices held firm on Thursday, as
Thailand faced tight local supplies after recent heavy rain and
as North Korea held talks with Thailand during the worst drought
in years.

"Recent rains in Thailand have disrupted the drying process of
the rice, resulting in fewer supplies coming onto the market,"
said a trader. "Supplies are hard to find."

Millers can dry unhusked rice with drying machines, but most
of them prefer to dry it in the sun to cut costs and improve the
taste.

With high demand from Asia and also from Nigeria, Thai 100
percent parboiled grade was quoted at $193-$195, FOB, up from
around $185-$187 last week.

Vietnamese rice prices are likely to ease in coming weeks as
millers are expected to release some old stocks to clear
warehouses before new supplies from the summer-autumn crop arrive
later this month.

"Most millers have held onto their stocks, but in coming weeks
they need to release the old stock from warehouses to have enough
space for new rice crop," said a trader.

Thai 25 percent broken grade was quoted higher at around $147-
$149 from last week's $145.

Vietnamese 25 percent broken grade was quoted steady at $136.

Myanmar 25 percent broken grade was quoted at $122-$123.

The North Korean commercial counseller to Thailand, Rim Jong
Duk has been holding talks this week with Thai Commerce Minister
Adisai Bodharamik, trade sources told Reuters.

"They held talks at the Thai commerce ministry, but not even
senior trade officials were allowed in the meeting," said one
source.

The two countries failed in April to clinch a deal for North
Korea to buy up to 500,000 tons of rice from Thailand over
disagreements on the quality and repayment of an outstanding
debt.

According to a report released by North Korean news agency
KCNA, the country's weak farm industry is under threat from the
longest dry spell in the nation's history.

The drought has continued through the rice-planting season
that began in mid-May, and has decimated the nation's fall
harvest, the report added.

Myanmar is estimated to have up to 300,000 tons more of rice
stocks for exports in the remaining months, traders said.

The military government, which controls the rice trade, was
gearing up efforts to capture overseas markets by lowering its
prices to a level relatively cheaper than other origins in Asia,
traders said.

The Geneva-based trading firm Novel recently signed a contract
with the government to buy up to 10,000 tons of Myanmar's 25
percent broken rice grade at around $122 per ton FOB, traders
said.

London based-Louis Dreyfus has also bought 43,000 tons of
Myanmar 25 percent broken rice grade for African markets for
June/July shipment, traders said.

During January-May 2001, Myanmar exported a total of 119,000
tons of rice, compared with only 23,000 tons exported in the same
period last year, figures from cargo surveyor Societe Generale de
Surveillance Myanmar (SGS) showed.

The country shipped a total of 110,000 tons of rice in 2000,
mainly to Bangladesh, compared with a total of 63,700 tons
exported in 1999.