The year's first bid for about 1 million tonnes of the government's rice stocks scheduled for next week is expected to see an active response from potential buyers thanks to strong demand.
Charoen Laothamatas, president of the Thai Rice Exporters Association, said he believed the new rice auction for 999,763 tonnes will be active, as no new supply had entered the market for a while.
Relatively low floor prices set by authorities also make the auction attractive, he said.
The floor price for white rice was set at only eight to 10 baht a kilogramme, while the market price is now quoted at 13 baht per kg. Hom Mali's floor price was set at 20-21 baht per kg against a 31-33 baht per kg market price.
Duangporn Rodphaya, director-general of the Foreign Trade Department, said the government would auction on a whole-warehouse basis, with a variety of grades and types of rice offered.
For the auction next Thursday, white rice will comprise 850,000 tonnes and Hom Mali rice 146,000 tonnes. The rice will be from 168 warehouses in 36 provinces.
Authorities estimate the total cost of rice put on sale at 11.7 billion baht. Interested bidders can observe the grains at the warehouses from Jan 21-28.
Commerce permanent secretary Chutima Bunyapraphasara, in her capacity as head of the subcommittee handling state rice sales, last week said the government planned to dispose of 17 million tonnes of rice left in its stockpile within two years, with 10 million tonnes sold this year. This year's sales will include premium-grade rice (60% of the total) and substandard grains (40%).
Authorities expect to call two or three bids for rice sales by March. The Commerce Ministry has called four auctions since last May, with sales of 681,740 tonnes worth 6.36 billion baht.
The government expects to deliver 900,000 to 1 million tonnes of rice through state contracts with China, Indonesia and the Philippines.