Thailand plans to sell that much stockpiled rice this month and next to generate US$2.8 billion (Bt99 billion), at an average price of $245 per tonne, in what could be the biggest rice clearance ever of the world’s second-largest rice exporter after India.

Le Van Banh, director of the Vietnamese Department of Agro-Fisheries Processing and Salt Production, said this large sell-off by Thailand would certainly have an impact on the global rice market following the law of supply and demand, as well as on Vietnam’s rice market.

However, the impact on Vietnam’s rice exports would not be significant, at least in the short term, Banh said.

He also said Thailand’s plan to sell 11.4 million tonnes of rice in just two months was not feasible.

He said Thailand exported on average 400,000 to 500,000 tonnes of rice per month.

“To sell 11.4 million tonnes in just two months sounds unrealistic,” he said as quoted by Vietnamplus.vn.

The Vietnam Food Association said the impact on rice exports would not be huge in the second and third quarters as most contracts had been signed in the last quarter of 2015, and there was estimated to be 1.4 million tonnes of rice remaining to be shipped abroad under existing contracts.

Banh said the stockpiled rice for this Thai clearance would mainly be “substandard” grain that the government had purchased under the 2012-13 rice pledging programme, and Thailand would target markets such as some in Africa where demands for quality were not too high.

Since May 2014, Thailand has auctioned off 5.05 million tonnes of rice worth $1.5 billion. The Thai government has previously said it aimed to clear the stockpiles by the end of 2017.

Meanwhile, major import markets of Vietnamese rice are China, the Philippines and Indonesia, which have high standards for rice quality and prefer newly harvested Vietnamese rice, Banh said.

“Rice exports from Vietnam will not be significantly affected by Thailand’s sell-off in the coming months,” he said.

Close watch

Banh said the Ministry of Agriculture and Rural Development had asked the Vietnam Food Association, rice companies and farmers to track movements in the global rice market closely, especially from Thailand’s clearance sale, for timely measures.

Nguyen Van Don, director of food-trading company Viet Hung in Tien Giang province, said the sale of Vietnam’s substandard rice would be affected the most by Thailand’s move, as Thailand was accelerating the sale of stockpiled rice sale in the months coinciding with Vietnam’s rice harvest.

The Ministry of Industry and Trade said at the end of April, days after Thailand’s announcement, that the global rice market was seeing unpredictable developments that would influence Vietnam’s rice exports in 2016.