The government is being urged to take the harsh step of ridding itself of old rice stocks, which have long been warehoused, and using them to produce either ethanol or animal feed, as a strenuous attempt to step up exports in the short term is proving futile.
"The government should not focus solely on accelerating its rice exports to fetch money to pay farmers, as it's impossible to sell 10 million tonnes of rice to raise 100 billion baht to repay farmers," said Korbsook Iamsuri, a former president of the Thai Rice Exporters Association (TREA) and now an honorary president.
"The government should therefore make some decisions on disposing of old rice stocks instead of selling them. This may be emotionally tough to accept, but it's better than doing nothing."
Newly harvested grains are not a matter of concern, she said, because buyers mostly favour new rice.
Caretaker Commerce Minister Niwatthamrong Bunsongphaisan said last week China cancelled its order for 1.2 million tonnes of rice because of a corruption probe.
Chookiat Ophaswongse, an honorary president of the TREA, said the government is likely to take up to five years to dispose of its rice stocks, now estimated at 20 million tonnes.
Rice deteriorates in quality if kept for over three years, and shipments will not be easy now that several nations are beefing up their own exports.
Mr Chookiat noted relatively high stocks are now controlled by the Thai government and India, where rice reserves are estimated at 30 million tonnes or more, plus anticipated shipments from other producers such as Vietnam and Pakistan, so world rice prices are expected to fall further.
The price of Thai rice is apt to drop by US$30 a tonne in the first quarter of the year, he said.
The price of 5% Thai white rice is quoted at $430 a tonne, while Vietnamese rice trades at $395 a tonne. The price of old Thai grains averages $370 a tonne.
After a 3% decline in 2013, the London-based International Grains Council (IGC) forecasts the global rice trade to rebound to 38.6 million tonnes in 2014, up 1.3 million tonnes or 4% from the previous year's 37.3 million tonnes.
The IGC says the global rice trade will receive a boost in 2014 from higher shipments to Far East Asia (mainly China, Indonesia, the Philippines, South Korea, Bangladesh, Japan and Malaysia).
China is expected to buy 2.6 million tonnes in 2014, up from 2.5 million in 2013 and doubling the prior five-year average of 1.3 million tonnes.
Indonesia's rice imports are forecast to increase by 500,000 tonnes or 71% to 1.2 million tonnes in 2014, mainly due to government efforts to build rice reserves. In the Philippines, rice imports are projected to reach 1.6 million tonnes in 2014, up 128% from 700,000 tonnes last year.
Global rice production is expected to reach 470 million tonnes in 2014, up from 469 million last year, while global rice consumption is forecast at 471 million tonnes, up from an estimated 467 million tonnes in 2013.
Final stocks in 2014 are expected at 108 million tonnes, down from beginning stocks of 110 million tonnes.
TREA predicts Thailand will ship 7.5 million tonnes of rice this year, up from 6.61 million last year. From that amount, it will rake in US$4.5 billion this year, up from $4.42 billion last year.