The Agricultural Futures Exchange of Thailand (AFET) expects the government's plan to release pledged rice in its stockpile through the market will create at least 50,000 trading contracts for every 1 million tonnes of rice tendered through auctions for the six-month period.
Acting president Sakda Thongpalad said the market's rice product trading volume will be increased by almost 10,000 contracts, with 15 tonnes per contract per month.
His comments came after the Commerce Ministry's subcommittee overseeing the rice stock release, chaired by Commerce Minister Niwatthamrong Bunsongphaisan, approved the sale of between 500,000 and 1 million tonnes bought via pledging through AFET within six months.
Other methods comprise selling pledged rice through government-to-government deals and general auctions.
Plan to sell the pledged rice came after the government accepted a loss of 136 billion baht for the first year of the scheme. The loss included management costs and interest expenses incurred from borrowing money from the Bank for Agriculture and Agricultural Cooperatives to fund the populist programme.
Any rice that is sold offers funds for further financing the scheme, which has a budget capped at 500 billion baht.
Mr Sakda said the auction through the futures market will use a basis auction method, in which AFET's rice futures are used as the reference to create transparency for all rice traders.
With this method, bidders can guarantee the sales price of rice to be delivered at a specified time in the future, he said.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said the government is still able to manage the rice-pledging scheme without raising public debt.
Public debt sits at 44% of the country's GDP, still below the 50% threshold, said Mr Kittiratt, adding that the pledging level will still allow fiscal discipline.