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The government will lose about Bt8 billion in next week's round of rice bidding, as the market price of white paddy rice has fallen to only Bt10,500 a tonne.

The projected loss is being blamed on the government establishing too high a guaranteed price for white paddy rice, Bt14,000 a tonne, in the latest price-intervention programme for the second crop.

The government now has about 3.9 million tonnes of rice stockpiled.

Commerce Minister Chaiya Sasomsap yesterday announced his ministry would release stockpiled rice next week through the bidding. This is aimed at quickly clearing its stockpiles for the upcoming pledging project, which begins next Saturday.

The government needs Bt97 billion for the project, which targets 8 million tonnes of paddy rice. The government must release some of its stockpiles to ensure enough warehouse space for the new crop and use the revenue from the sale for the pledging programme.

The government will inevitably face huge losses from the bidding, because the market price for rice has decreased continuously following declines in prices of agricultural goods, said a rice-trader source who asked not to be named.

"The government will be unable to sell enough rice at Bt14,000 a kilogram to cover its costs, because the market price is much lower. It is estimated the government will lose about Bt2,000 a tonne in releasing the stockpiles," said the source.

Millers must also immediately process the paddy rice into regular rice; otherwise, they could use the remaining paddy rice to circumvent the rice-pledging scheme.