Thailand is the world's largest exporter of rice. This year Thailand wants to sell 5 million tonnes of rice, which is equal to one fifth of the world's annually traded supply. Dumping this large an amount would upset the world rice market and drive prices into the cellar.

Last year rice had a sharp jump in price to $1100.00 a tonne. Since then the price has been cut in half to about $580.00 per tonne. Recently the Vietnamese government sold 500,000 tonnes of rice to the Philippines, the world's largest importer, at $420.00 a tonne. There is talk of another sale of 1 to 1.5 million tonnes

Now you can begin to see the magnitude of the proposed Thailand sale. Thailand's problem is due in part from purchasing excess rice from farmers to keep prices high. Now, however, the Thai's are facing a dilemma. If they make this large sale, they could lose about $100.00 per tonne. On the other hand, if they don't work off the inventory, the price of rice will not rise.

Has the price of rice come down in the supermarket?

Does anyone want a bag of rice? originally appeared on BloggingStocks on Fri, 23 Jan 2009 15:00:00 EST. Please see our terms for use of feeds.