The government yesterday endorsed a plan to sell the existing 11.4 million tonnes of rice in state stocks, with the first lot due to open for bids next week.
Chutima Bunyapraphasara, the commerce permanent secretary, said the National Rice Policy Committee chaired by Prime Minister Prayut Chan-o-cha gave the nod to the auction proposed by the Commerce Ministry and estimated to fetch at least 100 billion baht.
The 11.4 million tonnes is a mix of Grade C, which is categorised as substandard quality for industrial use; Grade P, which passed ministry certification; and Grades A and B, meaning in slightly poor condition and in need of sorting for improvement.
The sales plan is mainly through general auctions on a warehouse basis. It is divided into three categories based on the percentage of Grade C rice in the mix in each warehouse.
Of the total, some 7.5 million tonnes is estimated to contain less than 20% of Grade C, with 1.5 million tonnes exceeding a 20% Grade C mix. The remaining 2.4 million tonnes is rated substandard and rotten rice that is not fit for human consumption.
The auction for those three categories will be made on a monthly basis between March and July, the period when new output has not been churned into the market yet.
The Commerce Ministry said rice prices are in a rising trend with Hom Mali fragrant rice from the 2014-15 harvest season trading at US$772 a tonne during April 20-26, up from $765 per tonne during April 8-19.
Hom Mali rice from the 2015-16 season was quoted at $728 per tonne during April 20-26, up from $721 during April 8-19. The 5% white rice was quoted at $397 per tonne, up from $390 for the same period.
Since the May 2014 coup, a combined 5.05 million tonnes of rice has been sold via 13 auctions, fetching 53.9 billion baht, while government-to-government deals sold 3.8 million tonnes for 50 billion.
The government's rice stocks reached 18.7 million tonnes through various rice-pledging schemes, which bought rice from farmers at prices 40% above market rates during 2011-14, crippling exports and leading to huge stockpiles.
The authorities are speeding up rice sales to prevent further losses, especially from rotten rice that has been kept for years in warehouses.