Surging Baht Wreaks Havoc On Thai Rice Exports

[wade72]

What I see allot of people missing is that the government can not sell the rice at a loss. It would fall under anti-dumping rules with the World Trade Organization.

They can sell if for whatever they want in their own country, or give it away for that matter, but once it crosses a boarder it falls under new rules.

So with Vietnam, Bangladesh, Myanmar, India, etc. selling at around U$ 450 per tonn and Thailand has to sell at U$625 to 650 because of the pledging scheme.... how much you think they are going to sell?

Release all you want as long as the other countries can supply the world demand they will have a hard time selling anything... Their only real hope is the other countries run out from the surplus of orders they are receiving from all of Thailand's X-customers.

Edited May 1, 2013 by wade72

[animatic]

Hoho. Now it's the baht rate killing rice exports.

Oh, this gets better every day. Next it will be Soros manipulating the baht to ruin Thailand.

Another policy if this government. all they care is to bring Mr. T back and also big project to fill up their own packet. I really think they are aware of effect of ASEAN in Thailand and they are taking what they can as before the ship sink

Well in this case it is RE-fill their pockets.

ie. the quid pro quo for getting the last election to done.

The group that controls the most voters, regardless of area bosses is

the global rice milling and middleman network, the rice pledging scheme

was the only mechanism that could be adequate payback for lining up the farmers,

It fell appart because of the floods last year, partly from trying to stem the waters

to gain the biggest post election pay-off, and now this year must make up that loss.

But the competition, world markets and strong baht are not cooperating at all.

So they must do it anyway and spin the blame any possible way.

And take these huge loans to slide sideways through accounts to payoff now not later.

It is part Shell Game and part Ponzi Scheme, and the Thai people will be holding the empty sack in the end.

Edited May 1, 2013 by animatic

[robblok]

What I see allot of people missing is that the government can not sell the rice at a loss. It would fall under anti-dumping rules with the World Trade Organization.

They can sell if for whatever they want in their own country, or give it away for that matter, but once it crosses a boarder it falls under new rules.

So with Vietnam, Bangladesh, Myanmar, India, etc. selling at around U$ 450 per tonn and Thailand has to sell at U$625 to 650 because of the pledging scheme.... how much you think they are going to sell?

Release all you want as long as the other countries can supply the world demand they will have a hard time selling anything... Their only real hope is the other countries run out from the surplus of orders they are receiving from all of Thailand's X-customers.

Are you sure about this ? I would say if they sell at market price it would not be dumping. But I admit I don't know this for a fact and if you are right then Thailand is in even deeper problems then expected.

[Arkady]

He has forgotten that the rice pledging scheme had already made Thai rice exports totally uncompetitive.

[dunque]

What I see allot of people missing is that the government can not sell the rice at a loss. It would fall under anti-dumping rules with the World Trade Organization.

They can sell if for whatever they want in their own country, or give it away for that matter, but once it crosses a boarder it falls under new rules.

So with Vietnam, Bangladesh, Myanmar, India, etc. selling at around U$ 450 per tonn and Thailand has to sell at U$625 to 650 because of the pledging scheme.... how much you think they are going to sell?

Release all you want as long as the other countries can supply the world demand they will have a hard time selling anything... Their only real hope is the other countries run out from the surplus of orders they are receiving from all of Thailand's X-customers.

I very much doubt that the WTO would force Thailand to sell above the prevailing market rate. Rice is a commodity after all. The WTO is a trade agreement not a suicide pact

[dunque]

What I see allot of people missing is that the government can not sell the rice at a loss. It would fall under anti-dumping rules with the World Trade Organization.

They can sell if for whatever they want in their own country, or give it away for that matter, but once it crosses a boarder it falls under new rules.

So with Vietnam, Bangladesh, Myanmar, India, etc. selling at around U$ 450 per tonn and Thailand has to sell at U$625 to 650 because of the pledging scheme.... how much you think they are going to sell?

Release all you want as long as the other countries can supply the world demand they will have a hard time selling anything... Their only real hope is the other countries run out from the surplus of orders they are receiving from all of Thailand's X-customers.

I very much doubt that the WTO would force Thailand to sell above the prevailing market rate. Rice is a commodity after all. The WTO is a trade agreement not a suicide pact

Also ,meant to add that if this was the case the US and EU would be stuffed because of their colossal agricultural subsidies.

[monkeycountry]

Mus so nice being the PTP government. They try to sell rice at 50% over market price, and the baht has fluctuated less than 10%. However, since none of the red shirts understand the concept of "percentage", the PTP can tell them anything, and still get their votes :-)

[craigt3365]

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[Thai at Heart]

What I see allot of people missing is that the government can not sell the rice at a loss. It would fall under anti-dumping rules with the World Trade Organization.

They can sell if for whatever they want in their own country, or give it away for that matter, but once it crosses a boarder it falls under new rules.

So with Vietnam, Bangladesh, Myanmar, India, etc. selling at around U$ 450 per tonn and Thailand has to sell at U$625 to 650 because of the pledging scheme.... how much you think they are going to sell?

Release all you want as long as the other countries can supply the world demand they will have a hard time selling anything... Their only real hope is the other countries run out from the surplus of orders they are receiving from all of Thailand's X-customers.

Are you sure about this ? I would say if they sell at market price it would not be dumping. But I admit I don't know this for a fact and if you are right then Thailand is in even deeper problems then expected.

They can't sell it at the prices they are quoting anyway.

[Halion]

The baht exchange rate has little to do with the rice debacle. It only makes bad worse. The rice problem was was a bad plan, perfectly executed by arrogant politicians who thought they ran the global rice business. The gov't even went on the open market to buy futures to try to support their 50% over market paddy price. I doubt that those losses will ever be revealed. Thailand should calculate what the loss/vote ends up.

Excellent post. The two scenarios were caused by two seperate sets of action however, the overall gross effect is as to be expected very negative, but a predictable synergy for disaster.

[Shiver]

Why don't they store the rice in a way that stops it spoiling and just hang on to it until they get their day in the sun? When I look at the way things from CP foods will keep forever in my refrigerator, there must be a technology in this country that can preserve it. Maybe pump it full of nitrogen/ClO2 then vacuum pack it? I'm no chemist, but I can open a packet of 'Lays' crisps/chips and see if they've gone off after exposure to the atmosphere.

I don't know about the rest of the country, but in my part of Udon nobody I know of is planning on planting rice this year, so they might need it here in Thailand (of course the climate can vary wildly from one village to the next, so personal observation is no measure of national sentiment.

[thaifrelst]

Are anybody knowing the trend value of rice fields these days? Any change to lowering prices yet?

[whybother]

Why don't they store the rice in a way that stops it spoiling and just hang on to it until they get their day in the sun? When I look at the way things from CP foods will keep forever in my refrigerator, there must be a technology in this country that can preserve it. Maybe pump it full of nitrogen/ClO2 then vacuum pack it? I'm no chemist, but I can open a packet of 'Lays' crisps/chips and see if they've gone off after exposure to the atmosphere.

I don't know about the rest of the country, but in my part of Udon nobody I know of is planning on planting rice this year, so they might need it here in Thailand (of course the climate can vary wildly from one village to the next, so personal observation is no measure of national sentiment.

You do realise how much rice they have stored don't you? Maybe they could find a big enough freezer in Antarctica.

[bigbamboo]

This is so sad yet so predictable when you put unqualified people in positions of power.

Thailand's pride and joy, it's rice, has had it's reputation, quality and position as number one in the world wrecked.

Truly the hub of incompetent politicians.

[OzMick]

Why don't they store the rice in a way that stops it spoiling and just hang on to it until they get their day in the sun? When I look at the way things from CP foods will keep forever in my refrigerator, there must be a technology in this country that can preserve it. Maybe pump it full of nitrogen/ClO2 then vacuum pack it? I'm no chemist, but I can open a packet of 'Lays' crisps/chips and see if they've gone off after exposure to the atmosphere.

I don't know about the rest of the country, but in my part of Udon nobody I know of is planning on planting rice this year, so they might need it here in Thailand (of course the climate can vary wildly from one village to the next, so personal observation is no measure of national sentiment.

While your idea has merit, and can I suggest storing in a pure nitrogen atmosphere would prevent rotting and infestation, we are talking about a low value commodity where the storage costs would sooner rather than later exceed the value of the rice.

[johnlandy]

Hoho. Now it's the baht rate killing rice exports.

Oh, this gets better every day. Next it will be Soros manipulating the baht to ruin Thailand.

They don't need George Soros to ruin Thailand.

The clowns are doing quite well on their own.

[TackyToo]

The problem is, it seems more surprising to the guys in charge than snowfall on Koh Samui...

[thomash]

Okay now this week their blaming the failed government rice scam I mean scheme on the surging baht I wonder what they will blame it on next week!

[PoodMaiDai]

Oh, this gets better every day. Next it will be Soros manipulating the baht to ruin Thailand.

Don't give them any ideas.

But chances are you can count the number of Thais who even know who Soros is on a couple of fingers. But he's a farang and we're farang so it will be our fault soon enough. They should just get rid of us so they can work out their problems.

[jimbeam1]

For my pennies worth, there are really only three options.

1. Hoard the rice until it gets rotten.

2. Sell at rock bottom prices to get rid of the surplus.

3. Follow the new trend, bypass the wholesaler and sell directly to the distributer.

4. Turn it into wine

jb1

[AleG]

Not sure if I read it right, but if this year's pledging isn't worked out until October, then there may be a lot of disgruntled farmers in November , if they no longer see the rewards for their endeavour having the value that they've become accustomed to .

You know, now that I think about it, I wonder if this last days desperate efforts by Thaksin/PTP to get his amnesty done are spurred by the sense that the house of cards is going to collapse. That this is scheme was doomed to failure was a given from the beginning, I guess they calculated that\ Thaksin would had been back as a hero before it went bust.

Now they are facing the prospect of the scheme blowing up on their faces and their largest voter block ending up hating their guts.

[aussiebebe]

The thing that baffles me about this is, and correct me if I'm wrong, this pledging scheme was tried under PM Samak (2008?) and failed. Yet all the Thais could still be bribed to vote the for the Yingluck government. I wonder whether people will learn this time. I'm not optimistic that it will, I'm just curious.

[Neilly]

Not sure if I read it right, but if this year's pledging isn't worked out until October, then there may be a lot of disgruntled farmers in November , if they no longer see the rewards for their endeavour having the value that they've become accustomed to .

Now they are facing the prospect of the scheme blowing up on their faces and their largest voter block ending up hating their guts.

[Shiver]

Why don't they store the rice in a way that stops it spoiling and just hang on to it until they get their day in the sun? When I look at the way things from CP foods will keep forever in my refrigerator, there must be a technology in this country that can preserve it. Maybe pump it full of nitrogen/ClO2 then vacuum pack it? I'm no chemist, but I can open a packet of 'Lays' crisps/chips and see if they've gone off after exposure to the atmosphere.

I don't know about the rest of the country, but in my part of Udon nobody I know of is planning on planting rice this year, so they might need it here in Thailand (of course the climate can vary wildly from one village to the next, so personal observation is no measure of national sentiment.

While your idea has merit, and can I suggest storing in a pure nitrogen atmosphere would prevent rotting and infestation, we are talking about a low value commodity where the storage costs would sooner rather than later exceed the value of the rice.

I don't see why it would be so hard to do. The way they store grains anywhere in vast containers could easily be pumped with an inert gas then vacuumed if built correctly. Oh yeah, forgot....planning, quality, team, bribery.... I'll shut up now, stupid idea.

[hellodolly]

What I see allot of people missing is that the government can not sell the rice at a loss. It would fall under anti-dumping rules with the World Trade Organization.

They can sell if for whatever they want in their own country, or give it away for that matter, but once it crosses a boarder it falls under new rules.

So with Vietnam, Bangladesh, Myanmar, India, etc. selling at around U$ 450 per tonn and Thailand has to sell at U$625 to 650 because of the pledging scheme.... how much you think they are going to sell?

Release all you want as long as the other countries can supply the world demand they will have a hard time selling anything... Their only real hope is the other countries run out from the surplus of orders they are receiving from all of Thailand's X-customers.

Are you sure about this ? I would say if they sell at market price it would not be dumping. But I admit I don't know this for a fact and if you are right then Thailand is in even deeper problems then expected.

I was wondering if the anti dumping rules would apply to the government to government sales like the recent one with China where they never did come out and say how much they got for it but they did buy a lot of computers from China and if I remember correctly part of the price went to the Chinese government for inspecting them or endorsing them. Not exactly sure of what the details were..

Edited May 1, 2013 by hellodolly

[hellodolly]

The problem is, it seems more surprising to the guys in charge than snowfall on Koh Samui...

A good thing they don't ban people from telling the truth here on TV.

[hellodolly]

In regards to turning it into wine.

I think that some are all ready doing that and bypassing the Government.

With the exception of Chalerm who they told it was ear medicine and gave him a discount for large quantity buys.

Edited May 1, 2013 by hellodolly

[nietzche]

From the newspaper-that-shall-not-be-named, exports in general rose 5% in March, I think I'll stick with the disastrous scheme explanation for now.

Surely not, I thought the exporters were all going completely broke, no one was buying anything made in Thailand, and the only remedy was to print money and reduce interest rates to 0.5% so that the baht plummets back to 40 to the USD.

Apparently the rapid appreciation is largely due to greater foreign investment in Thai debt.

Seems like Thai finance companies are having to look overseas for money so they can give more loans to rice farmers to buy Toyota Fortuners.

Gonna be some good deals on repossessed condos and houses in a few years time when the bottom falls out this credit frenzy.

[bigbamboo]

The problem is, it seems more surprising to the guys in charge than snowfall on Koh Samui...

A good thing they don't ban people from telling the truth here on TV.

Enjoy it while it lasts everyone.

[hellodolly]

The problem is, it seems more surprising to the guys in charge than snowfall on Koh Samui...

A good thing they don't ban people from telling the truth here on TV.

Enjoy it while it lasts everyone.

Maybe I am misreading you.

Are you saying that the rice plan will work out and the price of rice in the rest of the world will rise high enough that Thailand can sell the rice that hasn't spoiled by then at a profit?