Huge markup on imported foods. Why?

[webfact]

Urgent task force to tackle baht volatility, declining exports
By Digital Media



BANGKOK, April 26 – The private sector is mounting more pressure on the Bank of Thailand (BoT) over the rising Thai baht, while the Commerce Ministry urgently set up an ad hoc committee to more closely monitor the volatile monetary situation.

Thai industrialists and business operators met with Commerce Minister Boonsong Teriyapirom today to discuss the overwhelming detrimental impact of the currency exchange rate on Thai exports since early this year.

The minister said the joint public and private sector committee will successively follow up development on the export landscape and meet regularly every quarter, or every month during the “unusual period,” until the Thai currency situation returns to normal.

Today’s meeting concluded that the country’s 8-9 per cent export target would remain unchanged, hoping that the baht will gradually slide down soon.

Payungsak Chatsuthipol, Federation of Thai Industries (FTI) chairman, said the private sector asked the Commerce Ministry to boost border trade which is currently at a combined value of Bt1 trillion or 10 per cent of the gross domestic product (GDP) to substitute the losing export revenue from the European and US markets.

The FTI, in a meeting with the central bank next Tuesday, will propose a five-point measure to deal with the strengthening baht such as a one-per cent reduction of the policy interest rate and control of foreign capital inflow, said Mr Payungsak.

He said Thai exporters have been severely battered by the strong baht, with exports falling by 40 per cent for jewellery and 30 per cent for industrial products while textiles, food and auto industries may give reduced purchase orders in the future.

Pornsilp Patcharintanakul of the Thai Chamber of Commerce called on the BoT to reduce the policy interest rate by 0.25 per cent as a signal to slow down foreign capital inflow.

The government should also levy tax on incoming capital – a measure already adopted by Malaysia, he said. (MCOT online news)


-- TNA 2013-04-26

[waza]

Ah the PTP economic miracle just keeps getting better.....

Exports 10% of GDP, baht volatility, declining exports

Tourism 6% of GDP, Thailand overwhelmed by influx of foreign tourists

Agriculture 12% of GDP, rice and assorted other vegetable scams subsidies, Rice scam costing 4% of GDP

Corruption 40% GDP

Edited April 26, 2013 by waza

[NeverSure]

Payungsak Chatsuthipol, Federation of Thai Industries (FTI) chairman,
said the private sector asked the Commerce Ministry to boost border
trade which is currently at a combined value of Bt1 trillion or 10 per
cent of the gross domestic product (GDP) to substitute the losing export
revenue from the European and US markets.


The FTI, in a meeting with the central bank next Tuesday, will propose a
five-point measure to deal with the strengthening baht such as a
one-per cent reduction of the policy interest rate and control of
foreign capital inflow, said Mr Payungsak.


He said Thai exporters have been severely battered by the strong baht,
with exports falling by 40 per cent for jewellery and 30 per cent for
industrial products while textiles, food and auto industries may give
reduced purchase orders in the future.

The government should also levy tax on incoming capital

Squirmly under control.

[laislica]

The government should also levy tax on incoming capital

Do your living expenses that you bring over now and again count as Capital?

[PaulHamon]

The government should also levy tax on incoming capital

Do your living expenses that you bring over now and again count as Capital?

no.

[laislica]

The government should also levy tax on incoming capital

Do your living expenses that you bring over now and again count as Capital?

no.

Do they put a ceiling on it?

I tend to transfer a years worth at a time.

[Locationthailand]

Boring article with no solutions other than the Govt is not going to alter its forecasts with the 'committee' meeting every quarter (and love this) until the economy returns to normal ... all by itself ... oh this govt is priceless in its inability.

[davejones]

Boring article with no solutions other than the Govt is not going to alter its forecasts with the 'committee' meeting every quarter (and love this) until the economy returns to normal ... all by itself ... oh this govt is priceless in its inability.

You obviously have some mistaken belief that governments can fix the economy. If that was the case, then we'd never have had the 2008 crisis. And even if we had, it will all be fixed by now. The economy of any country does better when governments don't try to fix things that they can't. They usually make things worse. So it's actually good that the Thai government is leaving the economy to sort it self out.

[samran]

Payungsak Chatsuthipol, Federation of Thai Industries (FTI) chairman,

said the private sector asked the Commerce Ministry to boost border

trade which is currently at a combined value of Bt1 trillion or 10 per

cent of the gross domestic product (GDP) to substitute the losing export

revenue from the European and US markets.

The FTI, in a meeting with the central bank next Tuesday, will propose a

five-point measure to deal with the strengthening baht such as a

one-per cent reduction of the policy interest rate and control of

foreign capital inflow, said Mr Payungsak.

He said Thai exporters have been severely battered by the strong baht,

with exports falling by 40 per cent for jewellery and 30 per cent for

industrial products while textiles, food and auto industries may give

reduced purchase orders in the future.

The government should also levy tax on incoming capital

Squirmly under control.

Slimy rent-seekers. Nothing more.

Edited April 26, 2013 by samran

[BuaBS]

These articles every day about the THB strength ?? If you look at the charts you can clearly see that the central bank has already taken action this week.

THB went up 0,8 B/USD , and is back to mid march levels.

It is not the Baht that is strong , the euro and dollar are weaker.

Against the yen has every thing to do with the kamikaze japanse central bank.

I'm very happy with the excange rate. Bought with average of 48,5B/euro and now sending it back home at sub 38B/euro.

Bought gold with it in euroland in the recent gold/silver manipulated drop..

[IsaanUSA]

Silly question.....can the exporters not lower their prices anymore?

[NeverSure]

Silly question.....can the exporters not lower their prices anymore?

They have to pay the new minimum wage, and even if they keep their prices the same and eat the loss from paying the new wage, their exports still cost the buyer more due to the more expensive (relatively) baht.

The exporters are hit from 2 directions.

Add to that (my opinion) that Thais aren't very productive for that wage, and the manufacturers and other exporters and hurting.

If they could significantly lower their prices I'd think they would because they are losing exports (business) in a significant way.

Oh, could they lower the price on rice, haha? Yes, but the Thais feel a sense of entitlement plus they can't lose face by admitting a mistake. So the rice rots in warehouses. Even if the Thais admitted the mistake and sold the rice at market prices, they have already lost their traditional customers to India and other places.

We can easily forget that we are all loyal to the people we do business with. If that business gives us good service and prices we stay with them. If we decide they don't give us good prices and service we go elsewhere and find a new loyalty to someone who will. Thailand would have a hard time getting some of its rice customers, who it abandoned, back. Thailand now can't be trusted to keep a steady supply of rice on the lunch table.

Soon Thailand won't be trusted to keep a steady supply of anything, including goods and labor, flowing.

[NeverSure]

Boring article with no solutions other than the Govt is not going to alter its forecasts with the 'committee' meeting every quarter (and love this) until the economy returns to normal ... all by itself ... oh this govt is priceless in its inability.

You obviously have some mistaken belief that governments can fix the economy. If that was the case, then we'd never have had the 2008 crisis. And even if we had, it will all be fixed by now. The economy of any country does better when governments don't try to fix things that they can't. They usually make things worse. So it's actually good that the Thai government is leaving the economy to sort it self out.

I agree in most cases, but when you already have a government that is managing the economy, ie the Federal Reserve and The BoT, then it's hard to say it is a pure "leave it alone."

It was government policies that allowed (I didn't say caused) the overheated US housing market which crashed. The government regulates banks, sets interest rates, and actually had a policy of making home ownership affordable via loans to everyone. The government owns (runs) Freddie Mac and Fannie Mae, the two biggest providers of home loans in the US.

Without their policies of easy money, the market couldn't have overheated and then crashed.

Thailand is making no down payment, easy home loans available to Thais. They are making new car loans with tax rebates easy. So naturally the real estate and car business is booming right now. There are of course other reasons, I'm just making the point that Thailand is very much interventionist.

They are interventionist in the rice market, much to the country's harm.

My point is that if you regulate some things, and have policies to influence other things, then you can't let the other things go out of balance.

Thailand has regulated a new minimum wage. They are competing for exports against countries which don't have that minimum wage. The apparent strength of the baht is partly cause by BoT keeping interest rates high, attracting foreign money. Part of the strength is the major currencies deliberately lowering the value of their currencies. The "value" of the baht is relative to other currencies which have fallen in value, by deliberate actions of the respective countries, who want low currency values to maintain their exports.

It is actually a currency war which Thailand hasn't reacted to. Thailand is managing parts of the economy and ignoring others. I don't think you can have it both ways.

I agree all is best left alone. but it isn't.

[IsaanUSA]

Soon Thailand won't be trusted to keep a steady supply of anything, including goods and labor, flowing.

That's a bit extreme.

So it sounds like the exporters could lower their prices to try and encourage sales, but they don't want to. Don't the Chinese sell items at a loss?

[charmonman]

Boring article with no solutions other than the Govt is not going to alter its forecasts with the 'committee' meeting every quarter (and love this) until the economy returns to normal ... all by itself ... oh this govt is priceless in its inability.

You obviously have some mistaken belief that governments can fix the economy. If that was the case, then we'd never have had the 2008 crisis. And even if we had, it will all be fixed by now. The economy of any country does better when governments don't try to fix things that they can't. They usually make things worse. So it's actually good that the Thai government is leaving the economy to sort it self out.

The idea that a capitalist economy left to its own devices with no regulation or management just runs along smoothly seems a bit dubious. Governments can certainly mismanage an economy and do great harm, but they can also manage it well and promote growth, fairness, stability or whatever other goal they've established. You just have to have competent people in charge, which is the hard part.

Do you think the most successful economy in the last couple of decades, China, got that way with no government intervention?

[Joe Mamma]

Hey, shouldn't our gas,oil, imported goods all go down in price? Where are the local perks?

[timewilltell]

Well for a start Thailand has capital OUTFLOW controls - you can't sell baht and buy pounds dollars or euros you have bought into the country. No control for incoming but control for outgoing so they could make a start by abandoning those regulations for a start.

[chiang mai]

Well for a start Thailand has capital OUTFLOW controls - you can't sell baht and buy pounds dollars or euros you have bought into the country. No control for incoming but control for outgoing so they could make a start by abandoning those regulations for a start.

Presumably you mean that you cannot export Baht and exchange it for Pounds Dollars or Euro's outside the country, because you certainly can do so inside the country. And just as an aside, making THB a freely convertible currency opens the currency up to attcaks by speculators, so best left as is I think.