Prime Minister Prayut Chan-o-cha wants all existing state rice stocks to be disposed of within this year.
Wiboonlasana Ruamraksa, permanent secretary for commerce, said Gen Prayut, who chaired the national rice policy committee's meeting yesterday, has ordered officials handling state rice sales to clear the entire 8 million tonnes of rice in the stockpiles within this year.
Most of the existing 8 million tonnes of rice stocks is white rice, 5 million tonnes of which is poor quality grain unfit for human consumption.
The remaining 3 million tonnes is mixed-grade in quality, suitable for human consumption.
The Commerce Ministry is now in talks with the Energy and Industry ministries to find proper ways to use rice stocks unsuitable for human consumption for industrial purposes, such as biomass and ethanol production.
For good-quality grain, the authorities plan to call general auctions at opportune periods.
Since the May 2014 coup, 8.68 million tonnes of rice has been sold via 23 auctions, fetching 89.2 billion baht.
Government-to-government rice deals have unloaded an estimated 3.8 million tonnes worth 50 billion baht.
State-held rice stocks have fallen sharply from the 18.7 million tonnes accumulated through various rice-pledging schemes during 2011-14.
The government has been paying about 500 million baht a month for rice warehouses.
However, Gen Prayut insists that the government's rice-selling plans should not affect domestic rice prices.
According to Ms Wiboonlasana, the government will not impose a volume target of rice exports this year, shifting the focus instead to increasing the shipments of processed products -- a move it hopes will increase the value of rice products.
However, she remains optimistic that rice exports will rise this year thanks to higher demand.
Thailand shipped 9.63 million tonnes of rice last year, second only to India, which exported 10.2 million tonnes.
Vietnam came third with 4.87 million tonnes, followed by Pakistan with 4.2 million tonnes.
Ms Wiboonlasana said last week the government would strike a better balance between rice supply and demand during the 2017-18 season in a bid to stabilise prices.
The state's rice management plan this year will be demand-driven, taking into account expected needs from key buyers in Asia, the Middle East and Africa for white rice and in Hong Kong, China and Singapore for hom mali fragrant rice.
Responsible officials will later call for talks with all stakeholders including farmers, millers and exporters to evaluate proper demand, be it domestic and overseas or existing global stocks, before coming up with a production plan for the 2016-17 season, she said.
In the meantime, the state-run Bank for Agriculture and Agricultural Cooperatives (BAAC) is optimistic that its packed rice sales will more than double to 25,000 tonnes this year after using Thailand Post's network as a transport channel.
Thailand Post, under a memorandum of understanding signed with the bank, cut its delivery rate for the packed rice to 8 baht per kilogramme from 30 baht, said senior executive vice-president Apirom Sukprasert.
After shipping costs are included, buyers of the packed rice pay 195 baht for a 5kg package, he said.
Grains to be sold by the BAAC are those are pledged under the 23.7-billion-baht storage credit scheme for 2 million tonnes of hom mali rice.
Only rice farmers who grow the hom mali subvarieties Khao Daw Mali 105 and Gor Kor 15 in 23 provinces in the North and Northeast can participate in the scheme, designed to temporarily keep a surplus of 2 million tonnes of hom mali rice from the market to prevent prices from further sinking.