(Adds details, comment on govt sale plans)
* Rice can be sold at home or exported
* Traders, exporters question reported govt rice deals
* Govt plans 260 billion baht for renewed scheme
By Apornrath Phoonphongphiphat
BANGKOK, Aug 20 (Reuters) - The Thai government will open a tender to sell 753,000 tonnes of milled and unmilled rice from its stocks next week, the Commerce Ministry said on Monday, in a bid to reduce its stockpile of the grain before a new buying scheme is launched in October.
Thailand's populist scheme to intervene in rice markets by paying farmers 15,000 baht ($470) per tonne for paddy, compared with around 9,000 baht in the open market, has made the grain so expensive few can afford to buy it.
Prices in Vietnam and India are around $170 per tonne cheaper than equivalent Thai grades, which have been pushed up by the high government intervention price since October.
As a result, the Thai government holds record stocks equivalent to 17 million tonnes of paddy, or around 10 million tonnes of milled rice.
"The tender will be held on August 28 and the rice can be sold in both the domestic and export market," the ministry said in a statement.
Commerce Minister Boonsong Teriyapirom, affirming recent comments, told Reuters the government had sold 2 million tonnes of rice to China and was in talks to sell another 1 million tonnes to Indonesia.
"We hope Indonesia will agree to buy from Thailand very soon," Boonsong said.
However, traders and industry officials said the agreements with China and Indonesia were just memorandums of understanding, preliminary offers to buy or sell rather than definite contracts with exact dates for payment and delivery.
Government officials, who declined to be named because of the sensitivity of the subject, confirmed the comments.
Exporters have complained for months that their business has dwindled because of uncompetitive Thai prices. Some have quit the business and others have become more active in neighbouring countries such as Cambodia.
"China has bought a lot of rice from Vietnam since the first half of the year and Indonesia is interested in buying from Vietnam due to its cheaper prices. There's no point buying from Thailand," said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.
Last week, Indonesia signed an option with Vietnam for 500,000 tonnes of rice.
Another Bangkok-based traders said: "The government may have told the public it has sold that rice, but we have found, to the contrary, that there is no loading activity at all and there is no activity on the rice market, which is strange."
The Thai government normally asks private exporters to manage deliveries for government-to-government deals.
Some traders said the government appeared to be trying to convince the public it could manage its stocks, at a time when it is facing strong criticism over its expensive policy, which opposition lawmakers may target in a possible censure debate in parliament.
The government has sold only 240,000 tonnes of rice to Ivory Coast. It has given no details on price or terms of payment for that deal in July.
The government is determined to maintain the intervention policy and plans to set aside another 260 billion baht ($8.25 billion) for the next phase in October, when the next main crop will be harvested, Boonsong said.
"The National Rice Committee is expected to meet this week to talk about the intervention details and we plan to submit the 260 billion baht budget request for cabinet approval soon after," he said. ($1=31.5250 Thai baht) (Editing by Alan Raybould and Clarence Fernandez)
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