The government's ambitious attempt to sell its rice stocks could hit a snag as demand ebbs for costly Thai grains.
Thailand is likely to face difficulty selling rice now that global market demand is slowing amid greater supply and price competition, said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association.
World rice trade is estimated at 41 million tonnes this year, down from an earlier forecast of 42 million tonnes, he said.
Worse still, Vietnamese rice prices have dropped significantly, with 5% white rice quoted at US$350 a tonne. The price of Thai 5% white rice, meanwhile, is as high as $400-405 a tonne.
"We expect most buying nations are now delaying their purchases to wait and see about the rice price situation," Mr Chookiat said.
As a result, he predicts tepid participation from bidders in the state's second rice auction of an additional 1 million tonnes to take place next week, with the government selling 400,000 tonnes at best.
Duangporn Rodphaya, director-general of the Foreign Trade Department, said the government was set to call the second auction for an additional 1,008,837 tonnes next Thursday.
The total includes 762,700 tonnes of 5% white rice, with the rest comprising 10% white rice, 15% white rice, 25% white rice, 10% white glutinous rice and broken rice.
The rice up for sale will be available at 124 state warehouses in 33 provinces, with the names of qualified bidders announced next Friday.
The government sold about half the nearly 1 million tonnes of rice put up during the year's first auction last month.
The plan is to dispose of 17 million tonnes of rice in state stockpiles within two years, with 10 million tonnes to be sold this year.
Sales this year will consist of both premium-grade rice (60%) and substandard grains (40%).