Such a minimum price would be the first in Thai history. Thailand is the world’s largest rice exporter.

Chutima Bunyapraphasara, permanent secretary of the ministry, admitted that the measure would affect the world market price. An investigation will be launched and the measure will be seriously considered only if the ministry finds that irregular factors were behind the recent price decline.

“If the government finds any irregularities, the minimum price will be set. This is to prevent rice traders from pushing farmers to lower their prices, with the aim of dumping [rice on] the market,” she said.

The market price for 5-per-cent white paddy rice is now Bt8,400-Bt9,000 per tonne.

Chutima noted that the recent price decline was huge while global demand remained high. There are fears that this could hurt the upcoming harvest season.

A source from the rice-trade industry attributed the plunge to weak demand in many countries as well as expectations that global output would increase as drought ended. He added that the Thai government’s rice auctions also created a negative psychological impact, as more supplies were hitting the market.

He said a minimum export price would make Thai rice even less attractive, especially compared with Vietnam’s, which is cheaper.

In a related development, the Foreign Trade Department said only 20 rice traders showed interest in joining the government’s fifth rice auction of the year, where 700,000 tonnes would be available for bidding. Only 13 were interested in joining the auction of 300,000 tonnes of poor-quality rice, good for the feed-meal industry and biomass-fuelled power generation.

Chutima hinted yesterday that releases of the government’s rice stockpile might be halted if this puts pressure on rice prices.