Thai Rice Losing On World Market: Tdri

[Lite Beer]

EXPORTS

Thai rice losing on world market: TDRI

The Nation on Sunday

TDRI president Nipon Poapongsakorn

BANGKOK: -- Govt should pay farmers directly; turn pledging scheme to price guarantee

Rice exports plunged by half to a mere 4.7 million tonnes between October last year and this month, mainly because of the government's rice-mortgage policy, the Thailand Development Research Institute (TDRI) has said.

During the same period a year earlier, rice shipments out of Thailand were as high as 9 million tonnes. Export value also dropped from Bt160 billion in the previous year to about Bt100 billion this year, TDRI president Nipon Poapongsakorn said.

The rice-pledging policy had destroyed the competitiveness of Thai rice in the world market because the government's mortgage prices were a lot higher, he said.

Nipon also pointed out that Thailand would suffer a loss of Bt87 billion to Bt100 billion immediately if the government decided to release 10.2 million tonnes of rice in its stocks. That was because the pledging price is high and the market price still low.

Thai rice currently costs more than rice from Vietnam. Thailand will end up losing US$75 to $77 (Bt2,364 to Bt2,427) per tonne if it sells at current market price, and this would not include the cost of pledging - about Bt260 billion.

Review policy

So, he said, the government should review its pledging policy by paying farmers directly.

"Thailand is losing huge amounts on subsidies that are helping not just poor farmers but also landlords and rich farmers, because the government is accepting all the rice that is entered in the pledging scheme.

More than 52 per cent of the rice entered in the pledging scheme comes from rich farmers," Nipon explained.

He added that if the government changed its pledging measure to providing direct subsidies to a particular group of small farmers, then it would only spend about Bt30 billion to Bt40 billion a year.

According to TDRI, about 80 per cent of Thai farmers are small, producing only about 10 tonnes of rice per harvest.

Hence, the government should focus subsidy plans on these small farmers so taxpayers do not have to shoulder the burden of subsidising the farming sector and that prices do not get distorted.

Nipon also called on Prime Minister Yingluck Shinawatra to urgently investigate the pledging project for corruption, pointing out that more than 3 million tonnes of paddy rice from neighbouring countries seem to have entered the pledging scheme.

He went on to say that though the government was planning to limit the volume of rice that can be pledged in the upcoming harvest season, it would still face the problem of graft and exports would continue dropping as the subsidy remained high.

The most efficient method would be to subsidise the price of rice and promote export growth by directly paying the difference to farmers under a price-guarantee scheme.

He said the government could change the name of the price-guarantee scheme if it did not it to sound like the same policy as the one introduced by the previous Democrat government.

-- The Nation 2012-07-29

[cloudhopper]

"The most efficient method would be to subsidise the price of rice and promote export growth by directly paying the difference to farmers under a price-guarantee scheme."

What a load of crap. Subsidies of any kind to anyone, large or small, distort market prices.

[TommoPhysicist]

The high value of the Baht has destroyed Thailands ability to export anything.

All the exports are down the toilet ......... so why try to blame one particular government policy?

If Thailand wants exports it needs to devalue its currency!

[Ricardo]

Bur at least the Yingluck government is also helping poor farmers in neighbouring countries, every time their rice is shipped into Thailand, attracted by the high prices here. Third-world Aid is a fine thing.

[jalansanitwong]

Considering how expensive everything has become in Thailand its amazing they export at all. I recently tried to export some Thai products only to discover the same item was available in India for one fifth the price!

Just wait till Burma gets its act together in the next few years.

[Phatcharanan]

"Nipon also called on Prime Minister Yingluck Shinawatra to urgently investigate the pledging project for corruption, pointing out that more than 3 million tonnes of paddy rice from neighbouring countries seem to have entered the pledging scheme".

You couldn't make it up could you?

[jaltsc]

The bottom line is the law of supply and demand. The demand will always be for cheaper rice, as long as the quality is comparable. It seems that Thailand has rested on the premise that its rice is the best quality and therefore will always be in demand, regardless of price. However, other countries have started exporting cheaper rice which meets the needs of the customer. There are no subsidies or other government programs which will overcome that. The only way to increase rice exports is by satisfying the demand by giving the customer what it wants, not by satisfying the supplier by creating more subsidies.

[jaltsc]

"Nipon also called on Prime Minister Yingluck Shinawatra to urgently investigate the pledging project for corruption, pointing out that more than 3 million tonnes of paddy rice from neighbouring countries seem to have entered the pledging scheme".

You couldn't make it up could you?

There are a lot of decent comedians out of work around the world and these guys are cracking bad jokes for free.

[apetley]

"Nipon also called on Prime Minister Yingluck Shinawatra to urgently investigate the pledging project for corruption, pointing out that more than 3 million tonnes of paddy rice from neighbouring countries seem to have entered the pledging scheme".

You couldn't make it up could you?

They were warned of this happening when the scheme was first suggested so should come as absolutely no surprise.

Sent from my GT-I9003 using Thaivisa Connect App

[Skywalker69]

The rice-pledging policy had destroyed the competitiveness of Thai rice in the world market because the government's mortgage prices were a lot higher, he said.

Biggest surprise ever. Buying an election is expensive, but this time it didn´t come out of Thaksins pocket but from the taxpayers.

[geriatrickid]

Considering how expensive everything has become in Thailand its amazing they export at all. I recently tried to export some Thai products only to discover the same item was available in India for one fifth the price!

Just wait till Burma gets its act together in the next few years.

Oh yes, everyone should just stop purchasing Thai products and wait until then,

One of the reasons the export market is not as robust as it was in previous years is because rice harvests around the world increased last year. I believe it was a 3% increase as per Hiroyuki Konuma, assistant director general of the Food and Agriculture Organization (FAO) of the United Nations. The FAO also forecast a decrease in world trade volume for 2012 as main importers reported greater production.

Increased production also resulted in a decline in China's rice import demand. Obviously, if supply is excessive, prices fall.

[TommoPhysicist]

Considering how expensive everything has become in Thailand its amazing they export at all. I recently tried to export some Thai products only to discover the same item was available in India for one fifth the price!

Just wait till Burma gets its act together in the next few years.

Oh yes, everyone should just stop purchasing Thai products and wait until then,

One of the reasons the export market is not as robust as it was in previous years is because rice harvests around the world increased last year. I believe it was a 3% increase as per Hiroyuki Konuma, assistant director general of the Food and Agriculture Organization (FAO) of the United Nations. The FAO also forecast a decrease in world trade volume for 2012 as main importers reported greater production.

Increased production also resulted in a decline in China's rice import demand. Obviously, if supply is excessive, prices fall.

Clearly rubbish.

Rice is priced in American Dollars ..... 4 years ago it was 40Bht = $1, today 30Bht = $1

So Thai rice is 33% more expensive just due to the currency change.

Vietnam and India are still at the $$$ exchange rate of 4 years ago ............. the only thing wrong with Thai rice is it's price, due to the rising Baht.

You can talk about export markets and farming policy all you want, but in the end the exchange rate has killed Thai rice exports and nothing else really matters. As to those who want to bash Thaksin ...... his lot didn't push the Baht to it's current value .....

Edited July 29, 2012 by TommoPhysicist

[Soupdragon]

Considering how expensive everything has become in Thailand its amazing they export at all. I recently tried to export some Thai products only to discover the same item was available in India for one fifth the price!

Just wait till Burma gets its act together in the next few years.

Oh yes, everyone should just stop purchasing Thai products and wait until then,

One of the reasons the export market is not as robust as it was in previous years is because rice harvests around the world increased last year. I believe it was a 3% increase as per Hiroyuki Konuma, assistant director general of the Food and Agriculture Organization (FAO) of the United Nations. The FAO also forecast a decrease in world trade volume for 2012 as main importers reported greater production.

Increased production also resulted in a decline in China's rice import demand. Obviously, if supply is excessive, prices fall.

Yes so obviously the logical thing to do if market prices are falling is to increase your price. Oh no wait that will result in nobody buying your product unless of course it's through the back door at a discounted price to the one you are declaring to the market.

[geriatrickid]

Oh yes, everyone should just stop purchasing Thai products and wait until then,

One of the reasons the export market is not as robust as it was in previous years is because rice harvests around the world increased last year. I believe it was a 3% increase as per Hiroyuki Konuma, assistant director general of the Food and Agriculture Organization (FAO) of the United Nations. The FAO also forecast a decrease in world trade volume for 2012 as main importers reported greater production.

Increased production also resulted in a decline in China's rice import demand. Obviously, if supply is excessive, prices fall.

Clearly rubbish.

Rice is priced in American Dollars ..... 4 years ago it was 40Bht = $1, today 30Bht = $1

So Thai rice is 33% more expensive just due to the currency change.

Vietnam and India are still at the $$$ exchange rate of 4 years ago ............. the only thing wrong with Thai rice is it's price, due to the rising Baht.

You can talk about export markets and farming policy all you want, but in the end the exchange rate has killed Thai rice exports and nothing else really matters. As to those who want to bash Thaksin ...... his lot didn't push the Baht to it's current value .....

I do not deny that FX has an impact upon prices, but it is only one factor.

Have you considered reading the rice export reports? If one were to rely solely on your opinion, one would think that Thailand was unable to sell its rice when competing against other countries. I like this example;

In other news, the U.S. once again missed out on the latest Iraqi tender as the Iraqi Grain Board instead chose to buy 80,000 tons from Thailand and 30,000 ton from Uruguay. Oryza News on July 27,2012

FYI India and Vietnam were also bidding on this tender.

Are the people that specialize in the rice trade are just as clueless;

From Oryza as well;

According to a recent report released by the Manila-based International Rice Research Institute (IRRI), global rice prices which have remained relatively stable, rising only 17 % since June last year against a 50-150 % hike seen in the prices of other crops are likely to increase in the coming months as rising production could force Asian countries to expand their reserves or impose bans on rice exports.

In 2010 Thailand, Viet Nam, and the US exported 9 million MT, 6.8 million MT, and 5.5 million MT respectively. With weather conditions being favorable, rice production in Cambodia, India, and Bangladesh is expected to increase this year. Global rice prices, which are expected to increase anyway this year due to the drought in China, would be forced up by the policy, though they are unlikely to hit the records seen in 2008 in Asia.

[PattayaPhom]

Considering how expensive everything has become in Thailand its amazing they export at all. I recently tried to export some Thai products only to discover the same item was available in India for one fifth the price!

Just wait till Burma gets its act together in the next few years.

Oh yes, everyone should just stop purchasing Thai products and wait until then,

One of the reasons the export market is not as robust as it was in previous years is because rice harvests around the world increased last year. I believe it was a 3% increase as per Hiroyuki Konuma, assistant director general of the Food and Agriculture Organization (FAO) of the United Nations. The FAO also forecast a decrease in world trade volume for 2012 as main importers reported greater production.

Increased production also resulted in a decline in China's rice import demand. Obviously, if supply is excessive, prices fall.

Clearly rubbish.

Rice is priced in American Dollars ..... 4 years ago it was 40Bht = $1, today 30Bht = $1

So Thai rice is 33% more expensive just due to the currency change.

Vietnam and India are still at the $$$ exchange rate of 4 years ago ............. the only thing wrong with Thai rice is it's price, due to the rising Baht.

You can talk about export markets and farming policy all you want, but in the end the exchange rate has killed Thai rice exports and nothing else really matters. As to those who want to bash Thaksin ...... his lot didn't push the Baht to it's current value .....

If you read the article, it states exports have plunged by half since last October.. THB-$ XE last October was the same as todays rate.....cant be the XE that is to blame.

[TommoPhysicist]

If you read the article, it states exports have plunged by half since last October.. THB-$ XE last October was the same as todays rate.....cant be the XE that is to blame.

They have contracts lasting several years. They just don't renew the contracts.

In another two years nearly all the existing contracts will have ended, and they won't be selling ANY rice.

[longway]

Considering how expensive everything has become in Thailand its amazing they export at all. I recently tried to export some Thai products only to discover the same item was available in India for one fifth the price!

Just wait till Burma gets its act together in the next few years.

Oh yes, everyone should just stop purchasing Thai products and wait until then,

One of the reasons the export market is not as robust as it was in previous years is because rice harvests around the world increased last year. I believe it was a 3% increase as per Hiroyuki Konuma, assistant director general of the Food and Agriculture Organization (FAO) of the United Nations. The FAO also forecast a decrease in world trade volume for 2012 as main importers reported greater production.

Increased production also resulted in a decline in China's rice import demand. Obviously, if supply is excessive, prices fall.

Clearly rubbish.

Rice is priced in American Dollars ..... 4 years ago it was 40Bht = $1, today 30Bht = $1

So Thai rice is 33% more expensive just due to the currency change.

Vietnam and India are still at the $$$ exchange rate of 4 years ago ............. the only thing wrong with Thai rice is it's price, due to the rising Baht.

You can talk about export markets and farming policy all you want, but in the end the exchange rate has killed Thai rice exports and nothing else really matters. As to those who want to bash Thaksin ...... his lot didn't push the Baht to it's current value .....

The rice exports of the last 4 years have remained healthy and robust inspite of the exchange rate. And it was Thaksin and his mates who ushered in this mega scam to rip off the thai tax payers, knowing full well what the exchange rates were, and are directly responsible for the debacle, they knew the risks.

Secondly who is it you imagine have pushed the baht to its current value?

Exchange rates matter for exports, but you are talking nonsense here.

[rubl]

More than 52 per cent of the rice entered in the pledging scheme comes from rich farmers," Nipon explained.

Since 2011-10-07 THB 260 billion has been spent on the rice price pledging scheme. Any stats on how much to middlemen, rich farmers, less rich farmers? Surely with the enormous amount spent there are no poor rice farmers anymore?

[kokesaat]

jaltsc " The demand will always be for cheaper rice, as long as the quality is comparable. It seems that Thailand has rested on the premise that its rice is the best quality and therefore will always be in demand, regardless of price."

My wife and I are no rice connoisseurs, but have eaten jasmine rice for nearly 40 years. For the past 6 or so years, when we're visiting our daughter in Texas, we buy Vietnamese jasmine rice.......$4 cheaper for 25 pounds as compared to Thai. We can't tell the difference.

Having said that, exported Thai jasmine rice always seems to be a cut above what we buy in Thailand. Are they letting the locals eat the scraps?

[bigbamboo]

This is what happens when unqualified politicians dictate economic policy.

[waza]

Considering how expensive everything has become in Thailand its amazing they export at all. I recently tried to export some Thai products only to discover the same item was available in India for one fifth the price!

Just wait till Burma gets its act together in the next few years.

Oh yes, everyone should just stop purchasing Thai products and wait until then,

One of the reasons the export market is not as robust as it was in previous years is because rice harvests around the world increased last year. I believe it was a 3% increase as per Hiroyuki Konuma, assistant director general of the Food and Agriculture Organization (FAO) of the United Nations. The FAO also forecast a decrease in world trade volume for 2012 as main importers reported greater production.

Increased production also resulted in a decline in China's rice import demand. Obviously, if supply is excessive, prices fall.

Of course well pointed out GK, world rice production has increased 3%, that explains why Thailands rice exports have dropped 50%.

"Rice exports plunged by half to a mere 4.7 million tonnes between October last year and this month, mainly because of the government's rice-mortgage policy, the Thailand Development Research Institute (TDRI) has said."

The TDRI are lying, It has nothing to do with the inept Thailand government and their corrupt rice pledging scheme. If fact the PTP and Yingluck are not responsable for the failure of all their election promises the rest of the world are. Or maybe you are a discredable poster who perverts the truth to cover the failings of the convicted criminal, Thaksin's PTP government and the machinations of the redthugs.

If a government cant do something simple like run the Thai economy how can it be trusted to do something of extreme importance like re-write the constitution for the benefit of all Thais?

Edited July 29, 2012 by waza

[geriatrickid]

jaltsc " The demand will always be for cheaper rice, as long as the quality is comparable. It seems that Thailand has rested on the premise that its rice is the best quality and therefore will always be in demand, regardless of price."

My wife and I are no rice connoisseurs, but have eaten jasmine rice for nearly 40 years. For the past 6 or so years, when we're visiting our daughter in Texas, we buy Vietnamese jasmine rice.......$4 cheaper for 25 pounds as compared to Thai. We can't tell the difference.

Having said that, exported Thai jasmine rice always seems to be a cut above what we buy in Thailand. Are they letting the locals eat the scraps?

I wouldn't call it scraps, but it seems to be the same everywhere. Tuna fishermen sell their best tuna to Japan because it fetches the best price.

Each coast Canada and the USA which have some of the best lobster in the world sell their best quality catches to foreign markets which will pay a higher price than the domestic market.