M'sia fails to buy 500,000 tonnes Thai rice

M'sia fails to buy 500,000 tonnes Thai rice

12 May, 2008

Reuters

BANGKOK, THAILAND - MALAYSIA'S bid to buy 500,000 tonnes of Thai rice failed as Thai traders shunned the low prices offered, traders who had participated in the tender said on Monday.

'Malaysian officials offered to buy at a very low price which Thai exporters could not accept,' a trader bidding for the deal told Reuters.

Malaysia bid for Thai 15 per cent broken grade white rice at $850 (S$1,163.88) per tonne free on board, while Thai exporters offered at nearly $1,000 (S$1,369), he said.

The Malaysian Agriculture Minister met Thai Prime Minister Samak Sundaravej in Bangkok last week during which he unveiled the plan to buy the rice from Thailand.

'Malaysian officials told us that the price is beyond their authority and they need to consult government before getting back to us,' another Thai exporter said.

However, no date for another round of talks has yet been set, while traders said the Malaysian government is also approaching Vietnamese exporters, expecting that Hanoi could supply some of the rice at cheaper prices.

'It's possible that Vietnam could grab some of the 500,000 tonnes Malaysia wanted to buy from Thailand, if its export ban is lifted by June as expected,' a Thai trader said.

Vietnam, the number two rice exporter, has banned the signing of new rice contracts through June to ensure adequate domestic supplies and to control inflation, which hit an annual 21.42 per cent last month.

India has also banned rice exports to make sure it had enough staple food for its massive population after bad weather hit crops, resulting in tight global supply and soaring prices this year.

Thai rice prices remained firm this week, with the benchmark 100 percent white rice quoting unchanged at $920 a tonne due to strong demand.

Thailand, the world's biggest rice exporter, has shipped 4 million tonnes so far this year, and aims to export more than 9 million tonnes. -- REUTERS