Thursday, 26 June 2014 12:12

BANGKOK: Checks by the military government in Thailand on its rice stocks have halted the flow of the grain from state warehouses to the market, pushing Thai rice prices to three-month highs though demand was subdued, traders said on Thursday.

The military, which seized power in May, has said it will make elaborate checks on rice stockpiled through a controversial procurement scheme launched by former Prime Minister Yingluck Shinawatra in 2011, on concerns about theft and damage. The loss-making scheme helped drive Yingluck from office.

The checks will precede a plan to manage the remaining stocks with the state, amounting to more than 10 million tonnes, the military has said.

Prior to the May 22 coup, the Commerce Ministry said it would sell around 800,000 to 1 million tonnes of rice from stocks to exporters and local traders.

However, the rice stocks sales have been completely stopped since the army took power and ordered the checks across the country, leading to supply tightening.

"The army wanted to see how many tonnes were stolen," said an official at the Ministry of Commerce, who asked not to be named.

The Thai 5 percent broken grade white rice was offered at $405-$415 per tonne this week, up from last week's $390, traders said. This week's levels were last seen around mid-March.

Supply was also curtailed as the harvesting season has ended. "We are waiting for the off-season crop which is due to be harvested in late July, but the size of production may not big enough to help ease price," said a Thai trader.

The off-season crop is the smallest rice crop grown in well-irrigated areas in the central plains, producing around 2-3 million tonnes of paddy annually.

Originally posted here:
Asia Rice: Thai prices climb to 3-month highs as supply tightens