Duangporn Rodphaya, director-general of the Commerce Ministry’s Foreign Trade Department, said the first 1-million-tonne shipment under the agreement had been completed midyear. After requesting a suspension of its rice imports, and it now seems ready for the second lot.

She said the Thai government would continue to ship the rice in small lots of 100,000 tonnes per month, as previously. Chinese and Thai officials are discussing the details of the shipments and should soon be able to get them started soon.

During the second lot of shipments, Thailand also expects that China will negotiate the import of another 1 million tonnes of rice from Thailand in the future, Duangporn said.

Meanwhile, the Commerce Ministry is confident of getting all the paperwork completed before the deadline next February for its legal action demanding compensation from four politicians and two former government officials involved in a fake government-to-government rice deal.

Duangporn said the ministry needed a long time to study the legal procedures carefully as it is a sensitive case that involves several agencies.

In addition, the ministry reported that 13 rice traders joined the fifth auction of the year for 750,000 tonnes of rice. If the government accepts their bids and sells this stock, it could generate Bt7.4 billion in sales value.

Moreover, 10 bidders have joined the auction for 255,000 tonnes of low-grade rice for the industrial sector. The ministry will consider their bids soon.

About 9.1 million tonnes of rice remain in the government stockpiles, including the latest lots put up for auction. As of August 26, Thailand has exported 6.3 million tonnes of rice this year, worth Bt99 billion, up by 8.2 per cent in volume and 6 per cent in value over the same period last year.

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.

“The measure is aimed at preventing the rice price from falling,” Chutima Bunyapraphasara, permanent secretary of the Commerce Ministry, said yesterday.

“The price of rice in the domestic market should average Bt8,000-Bt9,000 per tonne of paddy so that farmers will not get hurt from falling prices when supplies are abundant in the market,” she said.

The budget can buy almost half of total rice production, or 12.5 million tonnes from the 27.7 million tonnes of paddy expected to be reaped during the 2016-17 harvest season.

The 2016-17 rice harvest is expected to drop by 12 per cent because of the reduction in planting areas. Of the 27.7 million tonnes, 23.29 million tonnes will come from the main crop and 3.88 million tonnes from the second crop.

The Bank for Agriculture and Agricultural Cooperatives will use the Bt3.9 billion to support the rice-purchase scheme.

Two million tonnes of paddy rice are expected to be pawned, mostly Hom Mali (jasmine) and sticky rice form the Northeast.

Farmers will receive Bt1,500 per tonne for stocking their rice for two months after harvesting it.

The government will also provide a soft loan for the direct purchase of 2.5 million tonnes of paddy.

The Commerce Ministry will ask millers to help purchase about 8 million tonnes of paddy for holding two to six months so that rice will not face an oversupply problem during the harvest from November to February.

“The government should release the stockpiles gradually, for example 1 million tonnes at a time, to avoid negative impacts,” Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said yesterday.

The planned volume is too large and could put pressure on rice prices, he said.

After attending a meeting of the Thai Rice Management Policy Committee, Chutima Bunyapraphasara, permanent secretary of the Commerce Ministry, announced the plan to release all inventory totalling 9.5 million tonnes between now and the first half of next year.

The plan was aimed at increasing the efficiency of managing rice stocks and future planning.

The committee said it was confident that the move would not affect rice prices as globally, demand in the market was strong while output could drop because of drought.

Rice prices have been sliding for three years.

According to the United Nations’ Food and Agriculture Organisation, the average price of Thailand’s benchmark 5-per-cent rice fell from US$573 per tonne in 2012 to $518 in 2013, $423 in 2014 and $386 in 2015.

The average price in the first five months of 2016 continued the downtrend, tumbling by 3.6 per cent on year to $392.

In the first step of the release, rice traders will be invited to join the Foreign Trade Department’s auction of 2.18 million tonnes. Bids must be submitted on July 25.

The rice committee meeting approved the establishment of a foundation to promote innovation and commercial operations for agricultural products with initial capital of Bt750 million.

Private enterprises will be encouraged to take part in the foundation and promote sustainable development for the rice industry.

The foundation’s target is to double the value of agricultural products, mainly rice.