Mrs Duangporn Rodpaya, director-general of Foreign Trade Department,said that the first rice auction in the Bangkok has a brisk response as it has changed bidding system by allowing small traders to participate, increased demand for rice and global production shortfall.
Around 46 small, medium-sized and large exporters, millers and rice packers submitted bids yesterday.
The department has not yet signed any bidder for this yet as the department after the submission of the bids in the morning, would check the qualifications of the bidders and then open their sealed bids.
The winner of the bid will be the one whose bidding price is above the median price as most of the bidder proposed prices below the reference prices set by the panel handling rice sales. The reference prices were not disclosed.
But in any case if the highest bidding price is lower than the median price, the auction will be called off and a new auction will be staged until the Foreign Trade Department will get the satisfied price, Mrs Duangporn Rodpaya, explained.
Charoen Laothamatas, president of the Thai Rice Exporters Association (TREA), who observed yesterday’s bidding, said the auction was the best option and transparent where the bidders can be benefitted from strong demand and competitive Thai prices.
The Thai 5% white rice is now getting an average price of US$450-460 a tonne compared with as low as $380-390 a ton under the previous government, while the paddy market price is now 8,500 baht a tone.
This clearly shows the market demand for rice and this auction will also affect the market prices.
REA honorary president Chookiat Ophaswongse said Thai rice has now a great export market due to higher demand and price competitiveness as market has a great demand for the supply of rice as market is in shortage after Vietnam beefed up its cross-border shipments to China,”
The Philippines is also due to call a bid to buy a new lot of 500,000 tons of rice on Aug 27.
Mr Chookiat also requested the officials to offer financial support to the Thai bidders so that they can proposed prices above the reference prices
The military regime last month decided to sell an average of 500,000 tons a month from existing state rice stocks and dispose of the existing 18-million-tonne surplus within three years through four channels.
These four channels are:
- General Auction
- Government-to-government sales,
- Direct sales
- Agricultural Futures Exchange of Thailand.