Thai Govt Set To Sell Rice Below Cost In Secret Deals, Source Says

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RICE

Govt set to sell rice below cost in secret deals, source says

Petchanet Pratruangkrai

The Nation

BANGKOK: -- The Commerce Ministry is secretly arranging to sell the government's rice to local traders at below cost, aiming to clear up its overwhelming stockpiles rapidly in preparation for upcoming rice production under the pledging project.

A rice-trader source said yesterday that a huge loss would be incurred if the transaction went through as the pledging cost of jasmine rice is above Bt32,000-Bt33,000 per tonne, but the government is expected to sell it at Bt29,000 a tonne.

The source said his company held secret talks with the ministry in the middle of the month. The ministry had invited traders to make offers for the government's stocks.

The government has offered to sell about 500,000 tonnes of jasmine rice.

The source said the discussion had not been recorded in writing by the ministry. Some exporters have offered to buy jasmine rice at Bt28,300-Bt28,500 a tonne. Prices like that would result in huge losses for the government, since they are much lower than the cost of the rice.

The source raised concern that this kind of secret dealing could lead to corruption and lack of transparency. It would also cause the market price of jasmine rice to drop, despite high demand caused by drought.

The government should open bidding to the public to show its transparency, the rice trader urged.

Meanwhile, Tikhumporn Natvaratat, deputy director-general of the Foreign Trade Department, said the Commerce Ministry planned to open bidding for some rice in the stockpiles soon.

He said the ministry was drafting conditions for releasing rice from the stocks to ensure the release did not have an impact on the market prices of rice.

-- The Nation 2012-10-31

[siampolee]

So we see that the whole scam scheme is a disaster. Who is going to foot the bill ?

Certainly not Thaksin and his cronies, certainly not this current maladministration,certainly not the middle men.

Oh it's poor old Somchai and Porntip the Thai man and women on the street who can't avoid taxes, a V.A.T. increase maybe to start with, an increase in other taxes,

Well done P.T.P. you've lined the pockets of your puppet master and his cronies now the country is sinking into a mass of debt due to your corrupt practices.

[kevinsan]

Make rice illegal and drive up the price. Psst... Wanna buy some rice.

[asiawatcher]

Pretty obvious the Govt is in deep yoghurt and whilst still maintaining its policy is fabulous (sic) the reality now bites and the country takes a fiscal hiding. Well done Yingluck. Have not seen your resignation letter yet...

And don't you just love the comment...

"... the discussion had not been recorded in writing by the ministry"

Would that not be in breach of the law?

AND

"... source raised concern that this kind of secret dealing could lead to corruption"

Too late - the corruption is endemic and epic in proportion already throughout the Govt and Thailand.

Edited October 30, 2012 by asiawatcher

[barefoot1988]

i would like to buy afew tonnes below cost and sell them back making use of the rice scheme.

[Thai at Heart]

A rice-trader source said yesterday that a huge loss would be incurred if the transaction went through as the pledging cost of jasmine rice is above Bt32,000-Bt33,000 per tonne, but the government is expected to sell it at Bt29,000 a tonne.

I don't understand these numbers, the maximum price for jasmine is 20,000. Can it be that drying, processing and storage adds another 10 to 13k on top? Someone is gouging MASSIVELY in this calculation.

[robblok]

i would like to buy afew tonnes below cost and sell them back making use of the rice scheme.

And who says that this is not going to happen.

[h90]

i would like to buy afew tonnes below cost and sell them back making use of the rice scheme.

And who says that this is not going to happen.

I think we can be sure this is already happening...maybe just on the paper to save the transport costs.....

[whybother]

The source raised concern that this kind of secret dealing could lead to corruption and lack of transparency.

COULD??

[rubl]

The government has offered to sell about 500,000 tonnes of jasmine rice.

I assume this refers to a topic from 2012-10-13?

http://www.thaivisa....f-jasmine-rice/

[marshbags]

A rice-trader source said yesterday that a huge loss would be incurred if the transaction went through as the pledging cost of jasmine rice is above Bt32,000-Bt33,000 per tonne, but the government is expected to sell it at Bt29,000 a tonne.

I don't understand these numbers, the maximum price for jasmine is 20,000. Can it be that drying, processing and storage adds another 10 to 13k on top? Someone is gouging MASSIVELY in this calculation.

The feeding chain is massive and the percentages aka tea money for those at the top end are really insulting for the ordinary farmers.

As for the top beneficary from this, who amazingly is in exile, it is way and above what the rest of the gredy B*ckst*ds get, put together.

Obscene in the extreme and another glaring contradiction re their supposed populist objectives.

The greedy self serving politicians aka PT goverment ect. and their fugitive leader are well and truly milking off all the cream.

How sad the reality is for the genuine poor with all the so called populist programes

marshbags

Edited October 31, 2012 by marshbags

[slapout]

A rice-trader source said yesterday that a huge loss would be incurred if the transaction went through as the pledging cost of jasmine rice is above Bt32,000-Bt33,000 per tonne, but the government is expected to sell it at Bt29,000 a tonne.

I don't understand these numbers, the maximum price for jasmine is 20,000. Can it be that drying, processing and storage adds another 10 to 13k on top? Someone is gouging MASSIVELY in this calculation.

They throw numbers out that someone pulls from a hat, in this case the selling price of 29,000 on the world market is most probably a wish. Yes the rest of the numbers sound about right, with the farmer getting about 14 to 15 baht of that, The sick part is the delay from selling to reciept of monies to the farmer. It is all done on a pay later scam, with noone putting any personal capital into the system, except the farmer and the tax payer. The shortfall is being financed by borrowing against the countries future while the scammers pocket as much as possible.

[Thai at Heart]

A rice-trader source said yesterday that a huge loss would be incurred if the transaction went through as the pledging cost of jasmine rice is above Bt32,000-Bt33,000 per tonne, but the government is expected to sell it at Bt29,000 a tonne.

I don't understand these numbers, the maximum price for jasmine is 20,000. Can it be that drying, processing and storage adds another 10 to 13k on top? Someone is gouging MASSIVELY in this calculation.

The feeding chain is massive and the percentages aka tea money for those at the top end are really insulting for the ordinary farmers.

As for the top beneficary from this, who amazingly is in exile, it is way and above what the rest of the gredy B*ckst*ds get, put together.

Obscene in the extreme and another glaring contradiction re their supposed populist objectives.

The greedy self serving politicians aka PT goverment ect. and their fugitive leader are well and truly milking off all the cream.

How sad the reality is for the genuine poor with all the so called populist programes

marshbags

Well on the basis, that it doesn't cost any more to store, process and ship crap rice versus, hom mali, how on earth can the fixed processing costs be 12 baht (0.40 USD) a kilo or 400 USD per tonne?

This would mean that it would be impossible to EVER match Vietnam's export pricing on processing cost alone. For that margin, i would put up a processing mill and do it for half the price, but then of course, I would get shot.

Edited October 31, 2012 by Thai at Heart

[ballpoint]

So, two campaign promises that were extremely effective in getting votes from the rural population have been exposed as frauds. Both the tablets and rice pledging have been totally exposed as Ill considered plans made with no forward thinking or budgeting, with the only goal being to deceive the voters. Well done PTP.

[Mosha]

Buying cheap and selling them it back at a higher price. The story line is in Ray Feist's "Rise of a Merchant Prince" Roo Avery did exactly that believe it or not. He must have had Thailand in mind when he wrote the book. I bet he didn't know he was writing prophecy instead of fantasy.

Edited October 31, 2012 by Mosha

[Thai at Heart]

But who is going to buy it from the traders at 29k per tonne? 935 USD per tonne?

500,000 tonnes at a 3,000 baht loss per tonne? 50mn USD? Can't add up......

[OzMick]

"He said the ministry was drafting conditions for releasing rice from the stocks to ensure the release did not have an impact on the market prices of rice."

That will be an interesting trick.

[Nickymaster]

Since the global media is following this rice scam, foreign countries are hesitating to buy the rice and provide kick-backs for Thaksin.

Now Thaksin is going to do the kick-back trick locally. Much safer!

Edited October 31, 2012 by Nickymaster

[bigbamboo]

Once again Thaksin has insisted on providing economic expertise Thailand could well do without.

[h90]

"He said the ministry was drafting conditions for releasing rice from the stocks to ensure the release did not have an impact on the market prices of rice."

That will be an interesting trick.

No it is easy.....You sell it for Thaksin who than sale it under the rice scheme...no impact on the market price....

[Thai at Heart]

The fact that this "secret" deal is out in the open is odd in itself. But are they really going to be so blatant as to hand a select bunch of millers 100 USD a ton margin?

The Thai government has reportedly held secret talks with some local rice traders to sell about 500,000 tons of jasmine rice at prices lower than the pledged price under the government rice mortgage program, according to local sources.

Sources say that the pledged price, including handling costs, of jasmine rice stands at around 32,000 - 33,000 baht per ton (about $1,030 - $1,065 per ton), but the government has agreed to sell at around 28,000 to 29,000 baht per ton (about $900 to $936 per ton) in clandestine meetings with local rice traders. This would cause huge losses of about 2 billion baht (about $64.5 million) if all the proposed 500,000 tons of jasmine rice is sold at these prices.

Thai fragrant Hommali rice is today quoted around $1,045 to $1,055 per ton today.

http://oryza.com/Rice-News/16736.html

I mean there is corruption and corruption, but if the millers have customers, why on earth don't they act as brokers and get a commission on the deal instead of the government just handing them 100 USD margin? So blatant it is amazing they can even think they will get away with it.

[chooka]

So we see that the whole scam scheme is a disaster. Who is going to foot the bill ?

Certainly not Thaksin and his cronies, certainly not this current maladministration,certainly not the middle men.

Oh it's poor old Somchai and Porntip the Thai man and women on the street who can't avoid taxes, a V.A.T. increase maybe to start with, an increase in other taxes,

Well done P.T.P. you've lined the pockets of your puppet master and his cronies now the country is sinking into a mass of debt due to your corrupt practices.

Do you want to know who is going to foot the Bill for this project? Just watch the supermarket shelves and the huge increases that Joe public is going to pay at the checkout, lets not forget that 30 baht meal that you once got at the street stalls and the like, will rise to around 50 baht. Everything will rise to compensate.

[Fozfromoz]

So, the opposition now need to raise this in parliament, and corroborate or disprove it, or at least get it on record for answer.

It all seems to relate to Mr. Source at the moment. Mr Source seems to say quite a bit.

[OzMick]

So, the opposition now need to raise this in parliament, and corroborate or disprove it, or at least get it on record for answer.

It all seems to relate to Mr. Source at the moment. Mr Source seems to say quite a bit.

But Mr Unknown Source still seems to have more credibility than Yingluk and Boonsong who seem to have taken lessons from Joh Bjelke-Petersen.

[hellodolly]

A rice-trader source said yesterday that a huge loss would be incurred if the transaction went through as the pledging cost of jasmine rice is above Bt32,000-Bt33,000 per tonne, but the government is expected to sell it at Bt29,000 a tonne.

I don't understand these numbers, the maximum price for jasmine is 20,000. Can it be that drying, processing and storage adds another 10 to 13k on top? Someone is gouging MASSIVELY in this calculation.

That was the whole reason for setting it up.

[hellodolly]

A rice-trader source said yesterday that a huge loss would be incurred if the transaction went through as the pledging cost of jasmine rice is above Bt32,000-Bt33,000 per tonne, but the government is expected to sell it at Bt29,000 a tonne.

I don't understand these numbers, the maximum price for jasmine is 20,000. Can it be that drying, processing and storage adds another 10 to 13k on top? Someone is gouging MASSIVELY in this calculation.

The feeding chain is massive and the percentages aka tea money for those at the top end are really insulting for the ordinary farmers.

As for the top beneficary from this, who amazingly is in exile, it is way and above what the rest of the gredy B*ckst*ds get, put together.

Obscene in the extreme and another glaring contradiction re their supposed populist objectives.

The greedy self serving politicians aka PT goverment ect. and their fugitive leader are well and truly milking off all the cream.

How sad the reality is for the genuine poor with all the so called populist programes

marshbags

They don't know how to

"The greedy self serving politicians aka PT goverment ect. and their fugitive leader are well and truly milking off all the cream."

So they just grab the ball's.

[hellodolly]

So, two campaign promises that were extremely effective in getting votes from the rural population have been exposed as frauds. Both the tablets and rice pledging have been totally exposed as Ill considered plans made with no forward thinking or budgeting, with the only goal being to deceive the voters. Well done PTP.

I see where China has offered to loan Thailand enough money to carry out there one student one tab plan. Maybe they will take rice in payment.

[Kilgore Trout]

So we see that the whole scam scheme is a disaster. Who is going to foot the bill ?

Certainly not Thaksin and his cronies, certainly not this current maladministration,certainly not the middle men.

Oh it's poor old Somchai and Porntip the Thai man and women on the street who can't avoid taxes, a V.A.T. increase maybe to start with, an increase in other taxes,

Well done P.T.P. you've lined the pockets of your puppet master and his cronies now the country is sinking into a mass of debt due to your corrupt practices.

Oh do'nt worry about somchai and porntip, the'll just blame western foreigners not the govt

Sent from my GT-S5660 using Thaivisa Connect App

[saltandpepper]

I'll take 5kgs now and 5kgs in January

What is the discounted price and whom do I pay to?

[animatic]

Pretty obvious the Govt is in deep yoghurt and whilst still maintaining its policy is fabulous (sic) the reality now bites and the country takes a fiscal hiding. Well done Yingluck. Have not seen your resignation letter yet...

And don't you just love the comment...

"... the discussion had not been recorded in writing by the ministry"

Would that not be in breach of the law?

AND

"... source raised concern that this kind of secret dealing could lead to corruption"

Too late - the corruption is endemic and epic in proportion already throughout the Govt and Thailand.

It couldn't LEAD tp corruption... because it IS corruption.

I like the way they say they need to make room for next hartvest pledging crop.

in other words their deal was so far out of sync with market functions that

they couldn't sell huge volumes of stock. And now need to DUMP IT.

They can't sell like this ti USA< because there are anti-Dumping laws,

so they are trying a back door scheme here fist.

But this was all so totally predictable AND predicted,

on they day they announced this LAST year.

Edited October 31, 2012 by animatic