The sale would be a rare commercial export deal for Japan, whose rice market operates in near isolation.

Trading companies, the Ministry of Agriculture and other parties concerned are considering the move, aimed at using private-sector stocks of locally grown rice from the last big harvest, one of the sources said.

Asian rice prices have almost trebled this year, but are still about one third of the wholesale price for the 2007 crop in Japan. Domestic prices are so high that the export market is minimal for Japanese rice, seen in Asia as a luxury food.

But the 2005 rice held in storage was bought for less than the current high world prices, because of a glut that year.

'We're looking into the possibility of a commercial-based deal (with the Philippines),' the source said by telephone.

'What we can put on the table would be 50,000 tonnes at maximum.' A

government-licensed rice price stabilisation agency paid 3,000 yen (S$40) per 60 kg to move part of the 2005 crop away from Japan's local market. Farmers received another 4,000 yen per 60 kg at the time from a stabilisation fund.

Asia's benchmark Thai rice price hit a record high above $1,000 (S$1,400) a tonne in late April, but has recently come down, with the benchmark 100 per cent white rice trading at around US$920. -- REUTERS