Thai Prime Minister Yingluck Shinawatra said Brunei is interested in importing more Thai jasmine rice, as she returned to Bangkok early yesterday morning after making her first official overseas trip since assuming office last month to the Sultanate Saturday.

His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam received Yingluck in audience at the Istana Nurul Iman and hosted a state banquet in her honour.

The premier told Thai reporters later that she presented books on the royal projects of His Majesty King Bhumibol to His Majesty the Sultan who expressed interest in Thai jasmine rice, and said Brunei was ready to import more of Thailand's signature commodity, Thai news agency, MCOT, reported.

Brunei is also willing to work with the Thai government and has agreed to exchange knowledge, technology and other cooperation including education, medical services and agriculture, Yingluck said.

The Thai premier said Brunei is willing to increase employment and care of Thai workers, while Thailand was ready to support development of the Association of Southeast Asian Nations (Asean) under the leadership of Brunei in 2013.

In response to a media report that fugitive ex-premier Thaksin Shinawatra had entered the Sultanate before Yingluck arrived, the Thai premier denied the report.

Yingluck will visit Indonesia, the current regional bloc chair, today and then go to Phnom Penh on Thursday and fly to Vientiane the following day.

Meanwhile, Thailand's plan to pay its rice growers far above market rates is expected to push up prices for the staple that feeds almost half the world's people as rice importing nations look to other countries for tightened supplies, Associated Press reported.

The new government in Thailand, the world's biggest rice exporter, has promised growers higher prices for rice in a scheme that will take effect Oct 7. It's putting no limit on the amount of rice it will buy.

What's good for Thai farmers, who have long complained of being shortchanged by middlemen, is proving less popular elsewhere in Asia. The effects of the rice policy are rippling through the region, where many countries are already struggling with fast rising food prices.

Thailand's rice exporters say they will ship less overseas because they will be unable to compete with the price the government pays. That in turn will tighten the global rice market, forcing up the staple's price in other countries.

The US Department of Agriculture forecasts that Thailand's rice exports will drop 20 per cent to eight million metric tonnes in 2012 because of the rice buying scheme. That could see Vietnam overtake Thailand as the No 1 exporter.

"The rice prices in the global market will definitely escalate, since the supply from Thailand, the biggest exporter, is seeing a downturn," said Witchuda Chummee, an analyst at Siam Commercial Bank's Economic Intelligence Center in Bangkok.

"Using the Thai prices as a benchmark, other countries, like Vietnam, will likely increase their prices also."

The Pheu Thai Party that swept to power in July 3 elections has said the government will pay farmers baht 15,000 (US$500) per tonne for unmilled paddy rice and baht 20,000 ($665) for unmilled jasmine rice. Before the election, unmilled paddy rice sold for baht 8,150 ($271) a tonne and milled paddy rice sold for baht 13,000 ($432) a tonne.

What's causing particular angst for exporters is that the government intends to buy as much rice directly from growers as they want to sell. - Borneo Bulletin (11th September 2011)