Thailand lost its three-decades-old title as the world's top rice exporter last year, falling behind India and Vietnam, industry sources said on Friday.
At $100 to $200 a tonne more than what other countries charge, Thai rice is not finding as many overseas buyers as it used to.
Vietnam on Thursday announced that its rice exports for 2012 reached 7.6 million tonnes, up 10% year-on-year. India's rice exports last year exceeded 9.5 million tonnes, according to US Department of Agriculture figures.
Thailand exported 6.9 million tonnes in 2012, down 35.5% from the 10.7 million tonnes it shipped in 2011, according to the latest figures of the Thai Rice Exporters Association and the Commerce Ministry. The export value in 2012 dropped by 20% to US$4.73 billion.
Of the 6.9 million tonnes, some 1.7 million were registered as government-to-government deals, which the private-sector association has questioned.
"The only government-to-government deal we saw evidence of was a 300,000-tonne shipment to Indonesia in early 2012," said Chookiat Ophaswongse, the association's honorary president. "The other deals are still a mystery to us since we've seen no records of them."
The exporters' association blamed the country's drop in exports on the government's paddy pledging scheme, under which it has agreed to buy unhusked white rice from farmers at a fixed price of 15,000 baht (US$484) per tonne and high-quality jasmine at 20,000 baht per tonne.
The scheme is one of the ruling Pheu Thai Party's populist policies used to win the July 2011 general election. The government has said it will continue the scheme throughout 2013 because it benefits farmers.
Since it started the scheme in October 2011, the government has stockpiled more than 10 million tonnes of rice as the price of Thai rice rose $100 to $200 above its competitors on the international market.
The World Bank last month estimated that Thailand would lose 115 billion baht on last year's stockpiled rice if it was forced to sell at today's prices.
The bank has predicted that the average world price for rice would fall from $580 per tonne last year to $520 this year because production of the staple food crop has increased, especially in India and China.
"I think this year China will import less and India will continue to export, so the competition will be tough and Thailand will be left hanging," Mr Chookiat said.