DOW JONES NEWSWIRES

  Thailand's domestic and export prices declined by 3-5 percent as the
government is set to begin a series of stock releases, according to a U.S.
Department of Agriculture attache report posted Thursday on the Foreign
Agricultural Services Web site.

  Estimates contained in attache reports aren't official USDA data. The text of
the attache report follows.

  Despite a sharp contraction of domestic prices of white rice this week,
prices of white rice will likely fluctuate as supplies of white rice paddy
remain tight.

  Domestic and export prices declined 3-5 percent from the previous week as the
Government will begin a series of stock release next week. On July 17, the
National Rice Policy Committee agreed to release MY2008/09 intervention rice
stocks of 763,920 tons, of which 300,000 tons are fragrant rice, and the
balance is 5 percent grade white rice. Fragrant rice will be tendered first for
both domestic and export market on August 6. The tender will be based on
basis-bidding approach in the Agricultural Future Exchange of Thailand (AFET)
for the delivery in September - November. The winners will be those who offer
the highest premium or lowest discount from the future prices on the delivery
dates. This tender will be a pilot project to stimulate rice future trading in
AFET due to marginal trading volume since its first trading in 2007. The tender
will likely benefit small-scale exporters, including domestic-oriented rice
traders, packers, and millers, as each contract is set at 15 tons. Despite a
sharp contraction of domestic prices of white rice this week, prices of white
rice will likely fluctuate over the next couple of weeks as supplies of white
rice paddy remain tight following aggressive current MY2008/09 second-crop
intervention program. Parboiled rice export demand remains strong as the
removal of Indian rice export ban is reportedly postponed. Meanwhile, the stock
release of white rice paddy is unlikely as most has been milled. Most of
outstanding paddy stock is glutinous rice paddy.

  As of July 27, the MY 2008/09 second-crop intervention program bought 4.9
million tons of paddy worth 54 billion baht ($1.6 billion), of which 4.2
million tons are white rice paddy. By the end of the program (July 31), the
Government is expected to buy 5.0 million tons out of the target of 6.0 million
tons. According the latest National Rice Policy Committee meeting, the Price
Insurance scheme will replace mortgage scheme in the new intervention program
for MY2009/10 main crop, including fragrant rice and white rice paddy. The
Ministry of Agriculture and Cooperatives is proposing to the National Rice
Policy Committee this week the insured prices of 15,300 baht/ton ($453/MT) for
fragrant rice paddy and 10,000 baht/ton ($296/MT) for white rice paddy, based
on average production cost with profit margin of 30-40 percent. The eligible
tonnage for each farmer will be limited to 16 tons, based on average farm sizes
of 40 rai/farmer (6.4 hectares) with average yield of 400 kg./rai (2.5
tons/hectare). The program will pay the difference between insured prices and
market prices at the end of the contracts which are based on harvest pattern.

  The following are the reported rice exports (as is basis):

  Note on data: Export figures since March 22, 2002, do not include fragrant
rice. The authority to report fragrant rice exports was moved from the Thai
Board of Trade to the Ministry of Commerce's Office of Commodity Standards,
which does not release official fragrant rice export data. FAS/BKK will report
only official export numbers from the Board of Trade for non-fragrant and from
the Office of Commodity Standards for fragrant rice when available, but the
reader should bear in mind the difference between the data.

  Unofficial exports (excluding fragrant rice) for Jul. 20-26, 2009 totaled
99,059 tons, down 29,976 ton from the previous week, and down 9,982 tons from
the four-week moving average of 109,042 tons. Exports during Jan. 1 - Jul. 26
totaled 3,360,849 tons, as compared with 5,198,030 tons in the previous year.
According to the Department of Foreign Trade, Ministry of Commerce, total rice
exports (including fragrant rice) during Jan. 1- Jul. 21, 2009, amounted to
4,862,247 tons, down 26.2 percent from 6,587,870 tons in the previous year.