Business As Usual For The Govt As Thai Rice Loses Business

[AleG]

The simplistic response is to blame the government.

Haven't you learned yet that most of the time the most obvious answer to any question is frequently the right one.

So you blame the government of Thailand for the dumping of rice on the market?

The most obvious answer is that of dumping. Do you not read the business news from time to time?

Vietnam has quite a history when it comes to dumping goods. Remember shoes? The EU only recently lifted the punishing tariffs. How about the latest litigation with wind generated power towers or plastic bags or farmed fish products? India has dumped its products in the market before and it will do so again.

Again, why aren't some of you international economic experts aware of the issues of agricultural product dumping?

How come no one acknowledges that India was not even exporting rice until the past year? Are you aware that there was an export ban for 4 years because of poor rice yields in India?

The last rice harvests were so big that India has to prop up its rice farmers because local prices have fallen by 25%.

India has to get the surplus out of the country fast or else its rice growing industry will suffer serious damage. Of course you don;t take this into consideration do you? It is easier to blame the Thai government rather than to make an effort to know what is happening.

The Thai government can do little to stop Vietnam and India from doing what you allege they are doing, what they can do within their country is exactly the opposite of one would do if one wants to increase their exports. You know, artificially doubling the price of rice, a point that you seem very intent in ignoring, unsurprisingly.

Edited April 27, 2012 by AleG

[Thaddeus]

The simplistic response is to blame the government.

Haven't you learned yet that most of the time the most obvious answer to any question is frequently the right one.

So you blame the government of Thailand for the dumping of rice on the market?

The most obvious answer is that of dumping. Do you not read the business news from time to time?

Vietnam has quite a history when it comes to dumping goods. Remember shoes? The EU only recently lifted the punishing tariffs. How about the latest litigation with wind generated power towers or plastic bags or farmed fish products? India has dumped its products in the market before and it will do so again.

Again, why aren't some of you international economic experts aware of the issues of agricultural product dumping?

How come no one acknowledges that India was not even exporting rice until the past year? Are you aware that there was an export ban for 4 years because of poor rice yields in India?

The last rice harvests were so big that India has to prop up its rice farmers because local prices have fallen by 25%.

India has to get the surplus out of the country fast or else its rice growing industry will suffer serious damage. Of course you don;t take this into consideration do you? It is easier to blame the Thai government rather than to make an effort to know what is happening.

The Thai government can do little to stop Vietnam and India from doing what you allege they are doing, what they can do within their country is exactly the opposite of one would do if one wants to increase their exports. You know, artificially doubling the price of rice, a point that you seem very intent in ignoring, unsurprisingly.

Oh, he isn't ignoring it, he is applying the standard operational procedure when faced with an uncomfortable fact, and that is to obscure it with waffle, frequently shifting the blame.

[Buchholz]

not sure about importing rice from Vietnam at lower prices, but clever entrepreneurs are repeatedly smuggling cheap Cambodian rice into Thailand in order to claim it's Thai rice and subsequently sell it at the inflated Thai price:

Cambodia is just a stones throw from me, close enough to feel the ground shake in temple disputes and there is a small market in no-mans-land where the Cambodians sell their wares to the Thais (it is one way traffic) for a few weeks you could not park your car closer than a 30 minute walk to the place, why was it so busy? ..... rice.

They started limiting the amount an individual could buy to 5 kilos per person, so there were hundreds of pick-ups with Dad, Mum, brothers, sisters, nieces and nephews all buying one bag each.

Two weeks ago they stopped the Cambodians selling rice.

and to think it only took the authorities six months to catch on...

You're in a lovely, albeit precarious, locale, Thaddeus.

Best wishes to you and yours.

.

Edited April 27, 2012 by Buchholz

[hyperdimension]

Haven't you learned yet that most of the time the most obvious answer to any question is frequently the right one.

So you blame the government of Thailand for the dumping of rice on the market?

The most obvious answer is that of dumping. Do you not read the business news from time to time?

Vietnam has quite a history when it comes to dumping goods. Remember shoes? The EU only recently lifted the punishing tariffs. How about the latest litigation with wind generated power towers or plastic bags or farmed fish products? India has dumped its products in the market before and it will do so again.

Again, why aren't some of you international economic experts aware of the issues of agricultural product dumping?

How come no one acknowledges that India was not even exporting rice until the past year? Are you aware that there was an export ban for 4 years because of poor rice yields in India?

The last rice harvests were so big that India has to prop up its rice farmers because local prices have fallen by 25%.

India has to get the surplus out of the country fast or else its rice growing industry will suffer serious damage. Of course you don;t take this into consideration do you? It is easier to blame the Thai government rather than to make an effort to know what is happening.

The Thai government can do little to stop Vietnam and India from doing what you allege they are doing, what they can do within their country is exactly the opposite of one would do if one wants to increase their exports. You know, artificially doubling the price of rice, a point that you seem very intent in ignoring, unsurprisingly.

Oh, he isn't ignoring it, he is applying the standard operational procedure when faced with an uncomfortable fact, and that is to obscure it with waffle, frequently shifting the blame.

So geriatrickid, do you support Pheu Thai's rice pledging policy, and why?

[DLock]

GK, trying to blame unanticipated external forces instead of looking at why Thailand's rice pledging scheme was flawed from the beginning and the Thai Government's inability or unwillingness to react and change their strategy is a weak stance.

Government's and Businesses make bad decisions. Competitors slash prices and market conditions change. It happens. But to not react quickly and smartly or to have any sense or urgency in formulating a plan to compete or win back marketshare is simply foolish.

And to support such folly is likewise.

[geriatrickid]

The Thai government can do little to stop Vietnam and India from doing what you allege they are doing, what they can do within their country is exactly the opposite of one would do if one wants to increase their exports. You know, artificially doubling the price of rice, a point that you seem very intent in ignoring, unsurprisingly.

Please explain how the price of rice in Thailand's domestic market is related to the price of rice in the export market. You are claiming that if the cost to the consumer of rice in Thailand was lower, Thai exports of rice would be higher. In this case, the price in the two markets are not related. Are you aware of how key commodities are priced?

[SomTumTiger]

The Thai government can do little to stop Vietnam and India from doing what you allege they are doing, what they can do within their country is exactly the opposite of one would do if one wants to increase their exports. You know, artificially doubling the price of rice, a point that you seem very intent in ignoring, unsurprisingly.

Please explain how the price of rice in Thailand's domestic market is related to the price of rice in the export market. You are claiming that if the cost to the consumer of rice in Thailand was lower, Thai exports of rice would be higher. In this case, the price in the two markets are not related. Are you aware of how key commodities are priced?

GK - its nice to know that in your world, your government never does anything that you disapprove of. How can I sign up for that kind of government too?

[geriatrickid]

GK, trying to blame unanticipated external forces instead of looking at why Thailand's rice pledging scheme was flawed from the beginning and the Thai Government's inability or unwillingness to react and change their strategy is a weak stance.

Government's and Businesses make bad decisions. Competitors slash prices and market conditions change. It happens. But to not react quickly and smartly or to have any sense or urgency in formulating a plan to compete or win back marketshare is simply foolish.

And to support such folly is likewise.

Had you taken the time to read my comments you would have seen that I wrote that there was no planning, i.e. a failure to anticipate.

The lack of planning is typical of Thailand. The agricultural policies that one sees in place in Thailand are relatively unchanged in the past decade. One can go back 25 years and see a similar approach. Thaksin, the military junta, and the Democrat government kept the same policy. The same bureacrats and technocrats are managing the portfolio. The strategy has been to emphasize increased crop yields through the use of more irrigation, dfferent grain varieties, increased mechanization and of course the use of more chemical products.

The rice pledging scheme in and of itself is not much of a deviation from an agricultural policy that is relatively unchanged over time. Whether or not the rice pledging scheme is a sound decision is an issue completely removed from the dumping of rice into the export market by Thailand's competitors. Had there been no rice pledging scheme, Thailand would still have a problem because Vietnam and India would still be dumping rice

You are now suggesting that Thailand "slash" its export prices to compete with Vietnam and India. Surely, you are aware that such a pricing strategy will fail in the long term. One need only look at the EU with the massive drain on the economy that such a strategy creates. Massive agricultural subsidies are a dead end. There is no reason for Thailand to cut its export prices at this time. India is not a reliable rice exporter and its past history is hardly that suggests longevity. The rice export deals India is signing are for the most part one shot deals intended to get rid of a massive surplus that if not cleared out fast risks doing serious damage to the Indian producers. India does not have the facilities to keep the rice in long term storage.

[geriatrickid]

The Thai government can do little to stop Vietnam and India from doing what you allege they are doing, what they can do within their country is exactly the opposite of one would do if one wants to increase their exports. You know, artificially doubling the price of rice, a point that you seem very intent in ignoring, unsurprisingly.

Please explain how the price of rice in Thailand's domestic market is related to the price of rice in the export market. You are claiming that if the cost to the consumer of rice in Thailand was lower, Thai exports of rice would be higher. In this case, the price in the two markets are not related. Are you aware of how key commodities are priced?

GK - its nice to know that in your world, your government never does anything that you disapprove of. How can I sign up for that kind of government too?

Why are you going off on a tangent? I replied to a comment that made an unsubstantiated conclusion.

If you disagree with me, then why not deal with the subject matter at hand?

If you believe that the domestic price of rice in Thailand has a direct impact on how the price of Thai rice for the export market is set then please explain. The fact of the matetr, is that you cannot, so you fall back on the standard defensive mechanism of making a completely unrelated statement. Good job.

[heiwa]

The Thai government can do little to stop Vietnam and India from doing what you allege they are doing, what they can do within their country is exactly the opposite of one would do if one wants to increase their exports. You know, artificially doubling the price of rice, a point that you seem very intent in ignoring, unsurprisingly.

Please explain how the price of rice in Thailand's domestic market is related to the price of rice in the export market. You are claiming that if the cost to the consumer of rice in Thailand was lower, Thai exports of rice would be higher. In this case, the price in the two markets are not related. Are you aware of how key commodities are priced?

GK - its nice to know that in your world, your government never does anything that you disapprove of. How can I sign up for that kind of government too?

Why are you going off on a tangent? I replied to a comment that made an unsubstantiated conclusion.

If you disagree with me, then why not deal with the subject matter at hand?

If you believe that the domestic price of rice in Thailand has a direct impact on how the price of Thai rice for the export market is set then please explain. The fact of the matetr, is that you cannot, so you fall back on the standard defensive mechanism of making a completely unrelated statement. Good job.

The job of politicians is to make up false good news and also to make bad news look good. This should have been a PTP election promise..... Vietnam has beaten Thailand in the high-end market for hommali fragrant rice. One may spout about dumping and pretend one is a Harvard scholar but isn't it better to be more down to Earth and find the reason for this dumping? The reason is Thailand's productivity (yields) are far lower than that of India and Vietnam and the quality is no better. Sometimes it is better to look at the big picture (the real situation) than partake in pretentious debate. Because Vietnam and India through working smarter and harder they are able to offer rice at a price (market price) that if Thailand farmers "tried" to match it would make them bankrupt. Governments subsidies is the only way they can survive. The fact of the matter is that Thailand can no longer farm rice profitably (costs exceed income) and therefore it is time to close shop and start importing foreign rice. Why should the working class factory workers who need to eat suffer from unproductive farmers. PTP by creating an imaginery market price (Vietnamese farmers don't have the option to go crying to a paternal government to receive fictional prices when costs exceed revenue) has taken away the need for Thai farmers to be competitive and therefore have "destroyed" them. Sometimes you must be cruel to be kind in order to survive rather than promising farmers gold bars forever more. Edited April 27, 2012 by heiwa

[AleG]

The Thai government can do little to stop Vietnam and India from doing what you allege they are doing, what they can do within their country is exactly the opposite of one would do if one wants to increase their exports. You know, artificially doubling the price of rice, a point that you seem very intent in ignoring, unsurprisingly.

Please explain how the price of rice in Thailand's domestic market is related to the price of rice in the export market. You are claiming that if the cost to the consumer of rice in Thailand was lower, Thai exports of rice would be higher. In this case, the price in the two markets are not related. Are you aware of how key commodities are priced?

I admit, it must take a genius in economics to grasp the concept that artificially inflating the price of a commodity leads to higher competitiveness in the market.

Alas!, I think I'm going to blame Lichtenstein for my lack of understanding.

[heiwa]

Inept to the point of calling for impeachment? Must be close... Appears there is always another scandal around the corner.... Perhaps Yingluck will get a second passport while she is visiting Dubai

[hellodolly]

The simplistic response is to blame the government.

Haven't you learned yet that most of the time the most obvious answer to any question is frequently the right one.

So you blame the government of Thailand for the dumping of rice on the market?

The most obvious answer is that of dumping. Do you not read the business news from time to time?

Vietnam has quite a history when it comes to dumping goods. Remember shoes? The EU only recently lifted the punishing tariffs. How about the latest litigation with wind generated power towers or plastic bags or farmed fish products? India has dumped its products in the market before and it will do so again.

Again, why aren't some of you international economic experts aware of the issues of agricultural product dumping?

How come no one acknowledges that India was not even exporting rice until the past year? Are you aware that there was an export ban for 4 years because of poor rice yields in India?

The last rice harvests were so big that India has to prop up its rice farmers because local prices have fallen by 25%.

India has to get the surplus out of the country fast or else its rice growing industry will suffer serious damage. Of course you don;t take this into consideration do you? It is easier to blame the Thai government rather than to make an effort to know what is happening.

So what you are saying the government jacking up the price for rice has nothing to do with the fact Thailand can't sell it.

I liked the part where Cambodia is smuggling it into Thailand to get top dollar.

[metisdead]

Posters are reminded to stay on topic and to refrain from comments concerning the character of other posters. One post removed.

[geriatrickid]

I admit, it must take a genius in economics to grasp the concept that artificially inflating the price of a commodity leads to higher competitiveness in the market.

Alas!, I think I'm going to blame Lichtenstein for my lack of understanding.

I will ask you one more time to explain how the domestic price of rice in Thailand is responsible for this current situation. The price Thai consumers pay for rice has no impact on the prices sought in the export market in this specific case.

Vietnam and India are dumping rice. Thailand's rice exporters have set a price that they want from the export market. Vietnam and India are alleged to be selling their rice at prices below cost.

Do you follow the rice market at all? Are you aware that as recently as 2008 there was an international rice shortage and prices went through the roof. The Philippines was on the verge of food riots. Mexico, Morrocco, Senegal, Yemen and several African countries all had food riots. As I stated previously, India had ceased all rice exports.

Vietnam suffered through the tungro virus and catastrophic infestations of the brown planthopper insect. (So much for the claim from an uninformed poster that stated Vietnam's rice yields were much better than Thailand.) After dousing the fields with potent chemicals, Vietnam has apparently recovered in part from its infestations. I liked this quote from AP in 2008; "The rice price has gone up 50 percent over the past three months, but I'm not making any more money because I have to pay double for fertilizer, insecticides and labor costs," said Nguyen Thi Thu, 46, a farmer in Ha Tay province, just outside Hanoi.

Another farmer, Cao Thi Thuy, 37, in Nam Dinh province, 75 miles south of Hanoi, said exporters have actually been paying less for rice over the last week". I doubt much has changed, except that Vietnams inflation has continued to increase and the country needs as much foreign money as it can get to try and control its inflationary economy.

The export rice cost crisis is an anomaly that will be corrected by the next major drought or typhoon. That is what happens.

Are you aware that India has one of the most precarious rice crops in the world? Do you know why? It is because almost 25% of the cost of rice cultivation is attributable to energy costs. As a nation dependent upon oil imports, the Indian agricultural sector needs lower energy costs in order to make agriculture cultivation and the transport of its exports cost effective. By chance, this year, Indian (and South Korea) obtained oil from Iran at distressed prices. Iran which has seen its oil embargoed has found a willing customer in India who have purchased as much Iranian oil as it can get.. The catch is that Iran cannot transfer the money out of India as it is payable in India. Instead, Iran must buy Indian products. As an indirect result, large amounts of Iranian petromoney is being directed into purchasing Indian commodities and manufactured goods. india has profited from iran's predicament. How long it will be able to take advantage of the Iranians is anyone's guess, but the Iranians are not idiots and sooner rather than later they are going to cut a deal that lets them get back to exporting oil and in propping up their economy.

Edited April 28, 2012 by geriatrickid

[AleG]

I admit, it must take a genius in economics to grasp the concept that artificially inflating the price of a commodity leads to higher competitiveness in the market.

Alas!, I think I'm going to blame Lichtenstein for my lack of understanding.

I will ask you one more time to explain how the domestic price of rice in Thailand is responsible for this current situation. The price Thai consumers pay for rice has no impact on the prices sought in the export market in this specific case.

Vietnam and India are dumping rice. Thailand's rice exporters have set a price that they want from the export market. Vietnam and India are alleged to be selling their rice at prices below cost.

Do you follow the rice market at all? Are you aware that as recently as 2008 there was an international rice shortage and prices went through the roof. The Philippines was on the verge of food riots. Mexico, Morrocco, Senegal, Yemen and several African countries all had food riots. As I stated previously, India had ceased all rice exports.

Vietnam suffered through the tungro virus and catastrophic infestations of the brown planthopper insect. (So much for the claim from an uninformed poster that stated Vietnam's rice yields were much better than Thailand.) After dousing the fields with potent chemicals, Vietnam has apparently recovered in part from its infestations. I liked this quote from AP in 2008; "The rice price has gone up 50 percent over the past three months, but I'm not making any more money because I have to pay double for fertilizer, insecticides and labor costs," said Nguyen Thi Thu, 46, a farmer in Ha Tay province, just outside Hanoi.

Another farmer, Cao Thi Thuy, 37, in Nam Dinh province, 75 miles south of Hanoi, said exporters have actually been paying less for rice over the last week". I doubt much has changed, except that Vietnams inflation has continued to increase and the country needs as much foreign money as it can get to try and control its inflationary economy.

The export rice cost crisis is an anomaly that will be corrected by the next major drought or typhoon. That is what happens.

Are you aware that India has one of the most precarious rice crops in the world? Do you know why? It is because almost 25% of the cost of rice cultivation is attributable to energy costs. As a nation dependent upon oil imports, the Indian agricultural sector needs lower energy costs in order to make agriculture cultivation and the transport of its exports cost effective. By chance, this year, Indian (and South Korea) obtained oil from Iran at distressed prices. Iran which has seen its oil embargoed has found a willing customer in India who have purchased as much Iranian oil as it can get.. The catch is that Iran cannot transfer the money out of India as it is payable in India. Instead, Iran must buy Indian products. As an indirect result, large amounts of Iranian petromoney is being directed into purchasing Indian commodities and manufactured goods. india has profited from iran's predicament. How long it will be able to take advantage of the Iranians is anyone's guess, but the Iranians are not idiots and sooner rather than later they are going to cut a deal that lets them get back to exporting oil and in propping up their economy.

What makes you say I think the Thai government sets the international market price for rice? what I said is that the gross subsidy kills the Thai exporters because they can't sell at the market price. At least not without a loss, as I expect this Government to Government deals will be.

Which is a patently obvious, so I don't know why you go on tangents about bugs in Vietnam and Iran's oil. I mean, besides deflecting the discussion away from what the Thai government actually does and how it affects it's exports.

In any case you should be telling those things to the government, they have the plan to increase the market price for rice to have a chance at exporting anything.

[hyperdimension]

Setting fixed high prices when the actual market prices have dropped substantially (for reasons that geriatrickid has described) doesn't make sense at all - nobody's going to buy, unless there really is something very special with the produce in comparison with competing produce. So the rice-pledging scheme is undoubtedly a complete and utter failure.

What do the Thai rice farmers themselves think?

Edited April 28, 2012 by hyperdimension

[billd766]

The difference between Thai and Vietnamese rice prices is "only" $110 per ton which is nothing IF you only want to buy a ton of rice.

However if you want 1.000,000 tons of rice that then turns into $110,000,000 which is a vast saving and if I were in the position to require that much rice I am certain I would buy Vietnamese rice over Thai rice at those levels and prices.

That Thai rice may be a little better doesn't count for much if you have to import using precious foreign currency to pay for it and if some people want Thai rice then OK buy some and charge the end user the much higher price too.

The problem of losing market leadership is that you have to work much harder to get it back and if your export sales drop by 50% for 2 years in a row that is the equivalent of losing a whole years exports in one go. How many years will it take to get that back.

[harryfrompattaya]

Gee is it ever nice to read all this valuable information all TV posters have. I was wondering if anyone can see an opportunity opening here for Thailand in asian trade circles? India and Vietnam cannot afford to keep selling at such a low price right. Also without storage India and Vietnam may find themselves in product shortages, Especially if Thai rice exporters purchase their rice. So Thailand is selling enough to keep in the game and if they like they can purchase the majority that India and Vietnam have to sell, at very good value. When the time comes that India and Vietnam cannot meet their quotas to other nations where will they buy from? Thailand of course and at Thai prices. To sweeten the deal Thailand will quarantee trade deals with the nations to purchase their exports with the money they get from rice sales.Gee all of a sudden Thailand is a major trader in asian trade circles, when you also consider their strong stable currency.The game is never over till the fat lady sings.

Are you invested in rice futures? I am and go long and short every day and I think you understand the game. Now you should be trading you will make billions you are genius.

[harryfrompattaya]

Loong, cost of goods depends on where you are to get the goods..... Our little Thai restaurant is in Wyoming USA. Just to get spices, Asian noodles, curries and all that is a 500 mile drive to Denver Colorado. So every few months we would drive to Denver to buy our needed supplies. It is cheaper for us to pay the high price for fuel than pay shipping. We are off the main interstate road system and suppliers will not deviate from the main roads so shipping is often more expensive than the product we order.

The suppliers are the large Asian grocery stores in Denver, 88, Pacific Ocean etc. Jasmine rice is only available in small bags locally and the Asian stores have the 50 pound bags. We would buy 3-4 50 pound bags. If we got the small bags the price would be much greater. Most of our supplies are bought in bulk for a lower price.

Just the stat of Wyoming is half the size of Thailand with a population of only 500,000. Hard to believe we are so remote considering that we are in the middle of the US.

You really should have mentioned that you are in the USA, not Thailand.

So the price of Jasmine rice in the USA has tripled? That really doesn't make sense if the Global market price is falling.

From the original article....

.....while Vietnam has beaten Thailand in the high-end market for hommali fragrant rice.....

Unless you are specifically buying Jasmine rice from Thailand, there should really be no increase in price at all. Even Thai rice should not have tripled. Sounds like the importers/suppliers have jacked up the price artificially.

You are right 6 month ago Costco was selling Jasmine a little cheaper than big C in LA Asia market 50 pounds cheaper in La than Thailand

Edited April 29, 2012 by harryfrompattaya

[geriatrickid]

What makes you say I think the Thai government sets the international market price for rice? what I said is that the gross subsidy kills the Thai exporters because they can't sell at the market price. At least not without a loss, as I expect this Government to Government deals will be.

Which is a patently obvious, so I don't know why you go on tangents about bugs in Vietnam and Iran's oil. I mean, besides deflecting the discussion away from what the Thai government actually does and how it affects it's exports.

In any case you should be telling those things to the government, they have the plan to increase the market price for rice to have a chance at exporting anything.

You don't understand what dumping is do you? There is not much anyone can do when there is short term dumping. Typically, the victim of such a practice would apply tariffs and penalties which is exactly what the USA and the EU have done in the past. However, such a strategy would not work for Thailand as there is not much to retaliate against. Instead, Thailand will wait it out and support its key export markets. The export of commodities is cyclical and it is only a matter of time before world rice markets swing back to "famine" from "feast". There may be a declared price for Thai rice, but a large client is going to be able to negotiate a discount. Unlike Vietnam and India, Thailand is sitting on a nice big fat foreign currency reserves and has low inflation.

[Thaddeus]

What makes you say I think the Thai government sets the international market price for rice? what I said is that the gross subsidy kills the Thai exporters because they can't sell at the market price. At least not without a loss, as I expect this Government to Government deals will be.

Which is a patently obvious, so I don't know why you go on tangents about bugs in Vietnam and Iran's oil. I mean, besides deflecting the discussion away from what the Thai government actually does and how it affects it's exports.

In any case you should be telling those things to the government, they have the plan to increase the market price for rice to have a chance at exporting anything.

You don't understand what dumping is do you? There is not much anyone can do when there is short term dumping. Typically, the victim of such a practice would apply tariffs and penalties which is exactly what the USA and the EU have done in the past. However, such a strategy would not work for Thailand as there is not much to retaliate against. Instead, Thailand will wait it out and support its key export markets. The export of commodities is cyclical and it is only a matter of time before world rice markets swing back to "famine" from "feast". There may be a declared price for Thai rice, but a large client is going to be able to negotiate a discount. Unlike Vietnam and India, Thailand is sitting on a nice big fat foreign currency reserves and has low inflation.

This may come as a bit of a shock to you, but rice and other produce rots and Thailand doesn't have low inflation.

[Colin Yai]

What makes you say I think the Thai government sets the international market price for rice? what I said is that the gross subsidy kills the Thai exporters because they can't sell at the market price. At least not without a loss, as I expect this Government to Government deals will be.

Which is a patently obvious, so I don't know why you go on tangents about bugs in Vietnam and Iran's oil. I mean, besides deflecting the discussion away from what the Thai government actually does and how it affects it's exports.

In any case you should be telling those things to the government, they have the plan to increase the market price for rice to have a chance at exporting anything.

You don't understand what dumping is do you? There is not much anyone can do when there is short term dumping. Typically, the victim of such a practice would apply tariffs and penalties which is exactly what the USA and the EU have done in the past. However, such a strategy would not work for Thailand as there is not much to retaliate against. Instead, Thailand will wait it out and support its key export markets. The export of commodities is cyclical and it is only a matter of time before world rice markets swing back to "famine" from "feast". There may be a declared price for Thai rice, but a large client is going to be able to negotiate a discount. Unlike Vietnam and India, Thailand is sitting on a nice big fat foreign currency reserves and has low inflation.

This may come as a bit of a shock to you, but rice and other produce rots and Thailand doesn't have low inflation.

I'm not quite sure what the "real" inflation rate is ,but from my personal experience shopping in Makro in Buriram its far from low ,just one item alone, 1 kilo of Bacon was 205 baht in Jan that same Kilo is now 290 baht!!.

[OzMick]

What makes you say I think the Thai government sets the international market price for rice? what I said is that the gross subsidy kills the Thai exporters because they can't sell at the market price. At least not without a loss, as I expect this Government to Government deals will be.

Which is a patently obvious, so I don't know why you go on tangents about bugs in Vietnam and Iran's oil. I mean, besides deflecting the discussion away from what the Thai government actually does and how it affects it's exports.

In any case you should be telling those things to the government, they have the plan to increase the market price for rice to have a chance at exporting anything.

You don't understand what dumping is do you? There is not much anyone can do when there is short term dumping. Typically, the victim of such a practice would apply tariffs and penalties which is exactly what the USA and the EU have done in the past. However, such a strategy would not work for Thailand as there is not much to retaliate against. Instead, Thailand will wait it out and support its key export markets. The export of commodities is cyclical and it is only a matter of time before world rice markets swing back to "famine" from "feast". There may be a declared price for Thai rice, but a large client is going to be able to negotiate a discount. Unlike Vietnam and India, Thailand is sitting on a nice big fat foreign currency reserves and has low inflation.

"Thailand is sitting on a nice big fat foreign currency reserves and has low inflation."

Both situations seem to be changing rapidly. Prices and wages are climbing rapidly with suggestions to increase VAT.

Rice exports can be maintained only if sold at a loss because other producers are more efficient and are not paying subsidies. How is this likely to change in the near future besides change of government?

[Skywalker69]

What makes you say I think the Thai government sets the international market price for rice? what I said is that the gross subsidy kills the Thai exporters because they can't sell at the market price. At least not without a loss, as I expect this Government to Government deals will be.

Which is a patently obvious, so I don't know why you go on tangents about bugs in Vietnam and Iran's oil. I mean, besides deflecting the discussion away from what the Thai government actually does and how it affects it's exports.

In any case you should be telling those things to the government, they have the plan to increase the market price for rice to have a chance at exporting anything.

You don't understand what dumping is do you? There is not much anyone can do when there is short term dumping. Typically, the victim of such a practice would apply tariffs and penalties which is exactly what the USA and the EU have done in the past. However, such a strategy would not work for Thailand as there is not much to retaliate against. Instead, Thailand will wait it out and support its key export markets. The export of commodities is cyclical and it is only a matter of time before world rice markets swing back to "famine" from "feast". There may be a declared price for Thai rice, but a large client is going to be able to negotiate a discount. Unlike Vietnam and India, Thailand is sitting on a nice big fat foreign currency reserves and has low inflation.

PTP Government and inflation doesn´t go hand in hand. With the Governments policy the inflation will escalate.

[hyperdimension]

Thailand will wait it out and support its key export markets.

Is maintaining high prices an appropriate way to "wait it out" whilst prices of rice from other countries have dropped? Or would it have been better for Thailand to keep their prices closer to actual market rates in order to more actively compete?

[Skywalker69]

What makes you say I think the Thai government sets the international market price for rice? what I said is that the gross subsidy kills the Thai exporters because they can't sell at the market price. At least not without a loss, as I expect this Government to Government deals will be.

Which is a patently obvious, so I don't know why you go on tangents about bugs in Vietnam and Iran's oil. I mean, besides deflecting the discussion away from what the Thai government actually does and how it affects it's exports.

In any case you should be telling those things to the government, they have the plan to increase the market price for rice to have a chance at exporting anything.

You don't understand what dumping is do you? There is not much anyone can do when there is short term dumping. Typically, the victim of such a practice would apply tariffs and penalties which is exactly what the USA and the EU have done in the past. However, such a strategy would not work for Thailand as there is not much to retaliate against. Instead, Thailand will wait it out and support its key export markets. The export of commodities is cyclical and it is only a matter of time before world rice markets swing back to "famine" from "feast". There may be a declared price for Thai rice, but a large client is going to be able to negotiate a discount. Unlike Vietnam and India, Thailand is sitting on a nice big fat foreign currency reserves and has low inflation.

This may come as a bit of a shock to you, but rice and other produce rots and Thailand doesn't have low inflation.

I would like PTP to rot as well.

[moe666]

Loong, cost of goods depends on where you are to get the goods..... Our little Thai restaurant is in Wyoming USA. Just to get spices, Asian noodles, curries and all that is a 500 mile drive to Denver Colorado. So every few months we would drive to Denver to buy our needed supplies. It is cheaper for us to pay the high price for fuel than pay shipping. We are off the main interstate road system and suppliers will not deviate from the main roads so shipping is often more expensive than the product we order.

The suppliers are the large Asian grocery stores in Denver, 88, Pacific Ocean etc. Jasmine rice is only available in small bags locally and the Asian stores have the 50 pound bags. We would buy 3-4 50 pound bags. If we got the small bags the price would be much greater. Most of our supplies are bought in bulk for a lower price.

Just the stat of Wyoming is half the size of Thailand with a population of only 500,000. Hard to believe we are so remote considering that we are in the middle of the US.

You really should have mentioned that you are in the USA, not Thailand.

So the price of Jasmine rice in the USA has tripled? That really doesn't make sense if the Global market price is falling.

From the original article....

.....while Vietnam has beaten Thailand in the high-end market for hommali fragrant rice.....

Unless you are specifically buying Jasmine rice from Thailand, there should really be no increase in price at all. Even Thai rice should not have tripled. Sounds like the importers/suppliers have jacked up the price artificially.

Its called the dollar has taken a dump over the last 5 years. A friend in Albuquerque NM has a Thai rest. his rice doubled in price over the last few years due to the falling dollar. Also a case of coconut milk doubleed.

[loong]

I believe that global trade in rice is quoted in $, so if the price is falling it should be cheaper in the USA.

[heiwa]

With reported wide spread corruption in the price pledging scheme by millers why doesn't the government revoke this scheme - at least to prove they "want to be honest". We all know why they won't revoke this scheme. If a scheme has been completely corrupted and the government does not step in to stop the scheme then it can only prove that the government in fact is completely corrupted. I think they could understand this in Grade 3. It appears some in Government need to go back to school. Thailand your government is a disgrace.

Edited May 1, 2012 by heiwa