With nearly 17% of the rice in government warehouses rotting, the government may face a loss of 72 billion baht by selling it off at rock-bottom rates.
Three million of 18 million tonnes of rice stockpiled under the former government's rice-pledging scheme have deteriorated to the point where only ethanol producers may be interested in it, said Panadda Diskul, permanent secretary in the Prime Minister's Office. His team has finished checking 90% of the stock.
One source said deteriorated rice that remains edible must be sold at low prices as buyers would have to improve its quality at a cost of between 2,500-3,000 baht a tonne.
Vichai Sriprasert, honorary president of Thai Rice Exporters Association, said the average cost of rice pledged was between 28,000-29,000 baht a tonne. But the private sector might only offer 5,000 baht a tonne to buy it now, he said.
He estimated if the government gradually sells the deteriorated stock it would lose 69-72 billion baht.
Another source said some companies, such as PTT Plc and Bangchak, were interested in buying the spoiled rice for ethanol production, but the government likely would wait to first take legal action against warehouse owners and government officials in order to offset losses with some compensation.