South Asia in urgent call for Thai rice
Bangladesh and Sri Lanka are in talks with Thailand for an urgent purchase of 400,000 tonnes of rice to replenish their falling stocks, says the Commerce Ministry's Department of Foreign Trade (DFT).
DFT deputy director-general Keerati Rushchano said the two countries have been hit by severe droughts and flooding in recent years, substantially damaging crop yields and forcing them to approach Thailand, which is not a regular supplier.
"The countries need to refill their stocks immediately so they are turning to Thailand, although it's been a long time since they've bought significant quantities of Thai rice," said Mr Keerati. "Tentatively, they're asking for prompt deliveries, with all rice being transferred 60 days after the deals are sealed."
Each country is seeking 200,000 tonnes of rice -- mostly parboiled grade and common grade white rice.
The benchmark common grade 5% white rice was quoted at US$410 (13,870 baht) a tonne, while parboiled 100% grade white rice was $439 a tonne, said Thai Rice Exporters Association.
Sri Lanka and Bangladesh normally grow rice for domestic consumption, primarily supplementing their stocks from neighbouring Pakistan and India when needed.
Sri Lanka imported 280 tonnes of Thai rice in 2016, while Bangladesh bought 151 tonnes, said the association.
Mr Keerati said the rice deals were expected to be secured through government-to-government (G-to-G) contracts.
But Thailand's state rice stocks are running low, as the Commerce Ministry has opened auctions to sell it off in recent years. There are only a few million tonnes left, down from a record high of more than 18 million tonnes.
With diminished state stocks, the G-to-G rice deals could mean private firms delivering the rice, he said. Traders said Bangladesh is also approaching private Thai exporters to secure the best price.
"Bangladesh asked for our rice price quotes, saying it would compare the prices offered by the government and private firms and choose the cheaper one," said a Bangkok-based rice trader who requested anonymity.