Thailand will sell a small amount of rotten rice at an auction on December 1 to test the market, Reuters reported on Thursday, citing a commerce ministry official.
This will represent the first sale in the country of spoiled rice, intended only for industrial uses such as the production of ethanol. Analysts expect the rotten rice to be sold much cheaper than edible stocks.
Thailand has amassed stockpiles of about 13 million tonnes of rice as a result of a subsidy mechanism that paid above-market prices to farmers. About 6 million tonnes of that rice is below standard or rotten, according to a statement on Wednesday by the commerce ministry, the news agency said. The quantity to be offered at the upcoming auction is 37,412.68 tonnes.
Thailand, the second-largest exporter of rice in the world, has exported about 8 million tonnes so far in 2015.
According to data by the USDA Foreign Agricultural Service, molasses-based ethanol accounts for 70% of total ethanol production in Thailand currently. Ethanol consumption is expected to rise to 1.27 billion liters in 2015 and 1.40 billion liters in 2016 due to a rise in demand for the E20 and E85 blends. These are being supported by the government through price subsidies.
Provided by SeeNews exclusively for Essentica.