The government has no choice but to release its rice stockpile before the new harvest enters warehouses in October, a UN Food and Agriculture Organisation (FAO) representative says.
Hiroyuki Konuma, FAO assistant director-general and regional representative for Asia and the Pacific, said the government will have to forego its expectation of fetching higher global prices.
"In 2010 and 2011, Thailand was able to export 10 million tonnes of rice, fetching a good price and earning a good reputation," he said. "Thailand should be able to reclaim that status if it adjusts its export price and maintains rice quality."
The current minimum rice price set by exporters at auction is slightly higher than what importers are willing to pay, which has led to a decline in Thai rice exports, he said.
"It is not the rice exporters' fault that they have to mark up the price, as they are forced to buy at higher prices from farmers," the FAO representative said, referring to the Yingluck government's rice-pledging scheme.
The government has bought rice at a price about 30% higher than market levels since the scheme was launched in 2011.
Mr Konuma said he hoped the government would normalise the situation by next year.
If the government lowered its rice export price, more grain would be released on the world market and by next year Thailand could export some 8-10 million tonnes since its rice production has increased 2% this crop year.
Responding to reports of rice contamination, Mr Konuma said the contamination reportedly involved only a small portion of rice exported through private deals to the United States.
Thailand normally has a good system of rice quality control, he said. "Thailand usually exports rice through a government-to-government system. We hope Thailand can regain its good name in the world market if it assures high quality and maintains competitiveness."
India is currently ranked the world's biggest rice exporter, shipping 8.6 million tonnes this year, followed by Vietnam (8.3 million) and Thailand (7 million).
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- Writer: Achara Ashayagachat