RICE traders have urged the government to rush to hold an auction for 1.29 million tonnes of rotten rice from its stockpiles while demand in the market is high during the drought.

"Instead of opening bidding for biogas or ethanol production, rotten rice could be produced as feedmeal. The government should urgently release its rice in the meantime to clear out stocks," a rice trading source said last week.

The government should allow general bidders, not just bidders for biogas or ethanol production, as many industries also want rotten rice.

If the government opens bidding to general traders, it should get a better price than by selling to just biogas or ethanol producers.

Rotten rice or Grade C rice should be trading at Bt4-Bt5 a kilogram. If the government only sold the rice for biogas production, the price could be bargained down to only Bt1-Bt2 a kilo.

The government should not be overly concerned that rice traders will mix rotten rice with rice for consumption, since they are also worried about their rice's quality and would not risk destroying their brand and company image, the source added.

Manut Kijprasert, president of the Thai Rice Mill Association, said the drought has driven up demand for rice, so it is a good time for the government to accelerate the release of rice.

The price has kept on going up during the past month since the drought hit, he said.

According to the association, as of Friday, white paddy rice was quoted at Bt8,200 a tonne and jasmine rice (Thai Hom Mali rice) at Bt13,000-Bt15,000 a tonne.

The export price of 5-per-cent white rice has climbed to $390 a tonne from $381 a tonne in one week, and of Thai Hom Mali rice from $1,037 a tonne to $1,046 a tonne.

Source: The Nation