Rice prices are expected to continue rising until the end of the year, with Thailand's state rice stocks due to be disposed of and natural disasters occurring in many countries around the world.
Commerce permanent secretary Wiboonlasana Ruamraksa reported to the National Rice Policy Committee chaired by Prime Minister Prayut Chan-o-cha that global rice demand is expected to surge throughout the year on anticipated lower production in light of natural disasters and a sharp drop in Thailand's state rice stockpiles.
The government now controls around 2.9 million tonnes, 2.7 million of which is poor-quality and decaying grain only good for industrial use and animal feed.
The figure has dropped sharply from as many as 18.87 million tonnes before 2014.
State rice stocks fit for human consumption have now shrunk to only 160,000 tonnes now after the government managed to sell off 1.66 million tonnes out of a total of 1.82 million tonnes put up for a second auction last month.
From the May 2014 coup till June 7, a total of 13.9 million tonnes of rice was sold via auctions, fetching 130 billion baht.
The government aims to dispose of existing state rice stocks by September or October this year.
"There will be no more quality rice in Thailand until the main crop in November, so many countries are now in a rush to purchase rice from Thailand," said Duangporn Rodphaya, director-general of the Foreign Trade Department.
Rice prices have increased over the last two months. As of June 2, free-on-board Thai hom mali rice prices were quoted at US$715 a tonne, up from US$632 a tonne last month, while Vietnamese fragrant rice was also up to $495 a tonne from the same period from $475.
According to a report by the US Department of Agriculture, the world's rice trade is expected to stay at 41.3 million tonnes t this year and 42.3 million tonnes in 2018, up from 40.6 million tonnes in 2016.