The government looks set to sign a memorandum of understanding (MoU) to sell as much as one million tonnes of rice a year in a government-to-government (G2G) deal with Indonesia late this month.
According to Commerce Minister Jurin Laksanawisit, the MoU signing will be organised in the final week of March, covering no more than one million tonnes of 15% to 25% white rice a year for four years.
However, the rice sales also include conditions, depending on the rice production of the two countries and the world rice price.
Thailand sold a total of 925,000 tonnes of rice under G2G contracts to Indonesia under the previous agreement from 2012 to 2016.
Over the past five years, no G2G rice deals between Thailand and Indonesia were carried out, as the Indonesian government initiated a self-sufficiency policy with regard to rice and promoted domestic rice production.
Nonetheless, Indonesia has still faced a shortage of domestic rice supplies in some years due to natural disasters.
The pandemic also prompted Indonesia to import more rice to serve domestic demand and to stabilise domestic rice prices.
Last year, Thailand exported a total of 89,406 tonnes of rice to Indonesia, up 46.3% from the previous year, with value totalling 2.262 billion baht, up 86.7%.
Mr Jurin said Thailand is also in talks for a similar G2G rice deal with the Bangladesh government for one million tonnes of white rice and parboiled rice.
Charoen Laothammatas, president of the Thai Rice Exporters Association, said the MoU with Indonesia will have no effect on Thailand's rice market because the contract is not yet officially signed.
Currently, he said it is very difficult to export Thai rice in the world market now that the strong baht has made Thai rice more expensive than the grains of competitors.
Thailand's 5% white rice price is now quoted at US$549 per tonne, while Vietnam's white rice stands at $513 -517. India's rice is quoted at $398-402, with Pakistan at $438-442 per tonne.
Thai parboiled rice prices, meanwhile, stand at $557 per tonne, while Indian parboiled rice was at $383-387 and Pakistan's parboiled rice at $457-461 per tonne.