Higher-Than-Expected Losses Negative For Thailand's Rating: Moody's

[hellodolly]

As if governments care.At least the money is now used to sponsor ordinary people. Abhisit wasted the money on bomb scanners, armored vehicles and a Zeppelin that were useless.

Name one ordinary person they are helping legally.

[hellodolly]

Heads roll over the embarrassing leaked report of the massive losses incured so far by the rice pledging scam.

BANGKOK, 4 June 2013 (NNT) - Prime Minister Yingluck Shinawatra has instructed the Ministry of Finance to provide Thailand’s economic information for Moody’s before it downgrades the country’s credit rating. Ms Yingluck on Tuesday said she had asked the Ministry of Finance to closely monitor Moody’s analysis and confirmed that the government was ready to provide the agency with complete information prior to the rating downgrade. Asked why the government did not clarify the rice pledging scheme’s loss of profit to the public, the premier said the loss was still unofficial, adding that she had not yet received the loss figures from the Ministry of Commerce. http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5606040010006

Seems that Yingluck isnt disputing that the rice scam is making losses, she is disputing the size of those losses. Based apon some new information that Yingluck has recieved from her finance minister.

BANGKOK, 3 June 2013 (NNT) - Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong declines to comment on Moody’s plan to decrease Thailand’s credit rating after the Thai government’s rice pledging scheme made a loss of hundreds of billions of baht.

Mr Kittiratt said at the moment he could not provide information about Thailand’s credit rating downgrade as he had not yet been informed of the matter in detail. http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5606030010011

Tuesday, Jun 04, 2013......Continuing the programme and bearing further costs would have major credit implications, it said. Previous estimates of losses for the 2011-12 harvest year were equal to 1.0 per cent of gross domestic product, but the current estimate puts the cost at 1.7 per cent of GDP or 7.8 per cent of total expenditure in 2012...... http://news.asiaone.com/News/AsiaOne%BNews/Asia/Story/A1Story20130604-427262.html

Sound like good advice, time to cut your losses...........But This is Thailand.

Wednesday May 29 2013. AS was widely anticipated by the market, Thailand has renewed its rice paddy pledging scheme for a third year, despite the scheme driving up Thai rice prices on the international market and costing the country its previously held position as the world's number one exporter. "We will be continuing with the scheme, with which we aim to go on supporting farmers. At this stage, we see no change in the intervention," said Thai commerce minister Boonson Teriyapirom. http://www.agra-net.com/portal2/pl/home.jsp?template=newsarticle&artid=20018048607&pubid=ag047

Maybe it is just me but some how I don't think Moody's isn't to interested in a Finance Minister who has admitted he lie's and says it is OK. He can try to justify the losses but it will fall on deaf ears.

[NeverSure]

Not sure on this part so if anyone can clarify let me know.

Rice scheme is for a 3rd year it seems. because of how thai government procedes thailand gets a downgrade in terms of credit rating. I assume these will effect fdi possibly? Now the amount of interest to pay back increases. considering this and recklessness of how things are heading. could thailand at some point earn a junk bond rating? maybe to far ahead

is it possible that the massive amount of rice gets sold into the thai market place?

Sent from my using Thaivisa Connect Thailand mobile app

Thailand is heading for junk bond status. As for rice, Thailand grows far more than it needs and is was a big net exporter of rice. The Thais can't eat that much rice so it piles up "somewhere" or gets sold via corruption as we saw. Additionally, rice is being smuggled in at least from Cambodia, and sold to the government as Thai rice for support prices.

The world has far more rice than it needs right now due to good harvests, and this Thai rice that's getting old may or may not be good rice. No one seems to answer to where it is. I even have suspicions that it is being stolen. To store as much rice as has been purchased by the government seems almost impossible to me. The numbers are overwhelming.

So whether a lot is stolen or perhaps spoiling in storage is unknown. No one will account for it, apparently not even to Moody's. The one thing we do know is that even if all is intact, in good shape, and accounted for, it's worth about 1/2 what the government borrowed from the Agricultural Bank to pay for it. Based on articles we have posted here and doing the math from that, the best case scenario of all rice in good shape and accounted for would leave a loss of about 350 billion baht. Some suspect it's missing and/or not in good shape and that the losses are far greater. There is 700 billion baht owed by the government to its own Agricultural Bank, and that's "off books" and not counted as debt. Their reasoning is that they will sell the rice and pay it back, so no loss. This is Thailand.

[NeverSure]

Rice-pledging budget must be replenished, says BAAC

Pranee muenphangwaree,

Suphannee Putisut

The Nation June 5, 2013 1:00 am Link

The Bank for Agriculture and Agricultural Cooperatives says it has an adequate budget to continue the rice-pledging scheme until the end of the latest project, but beyond that, the government will either have to borrow more or accelerate its stockpile releases to earn some rice-sales revenue as soon as possible.

"BAAC executive vice president Boonthai Kaewkhantee said the bank would be able to fund the scheme until the end of September after the Public

Debt Management Office provides the final amount of Bt40 billion to continuing the project until the end of this round.

"The government has spent a total of Bt500 billion for the rice-pledging projects since 2011. If it wants to continue the pledging policy, it needs to borrow or provide a new budget."

He explained that the budget for the pledging project was separate from the bank's liquidity. The BAAC still has good financial health with liquidity of more than Bt100 billion, lower than last year's Bt200 billion because of withdrawals by government agencies."

Can anyone else read between the lines here and get what I get? $500 bil spent and more needed. Government owned bank loses BT100 bil due to withdrawal by government. For what? Bank is solvent because it has bt100 bil in assets, but denies that its loan of bt500 bil to the rice scheme is really a debt.

bt500 bil and climbing in bad debt against bt100 bil in assets after bt100 bil bled off by government, and it's solvent. The clear fact is that it's upside down by an (admitted) 400 bil and climbing. It doesn't even have 20% of the needed capital to cover the rice scheme loans and it is getting worse.

This is the most on its lips bank I've ever seen.

That bank is so tits up its scary.

[Robby nz]

The Agg Bank is not the only Govt bank that they are borrowing from but for a different purpose :

BANGKOK: -- The Government Savings Bank (GSB) will be lending Bt80 billion to the government for the first phase of its water-management and flood-prevention modules.

The Public Debt Management Office has already chosen creditors for the first loan, which amounts to Bt120 billion, via a bidding process.

GSB and the KrungThai Bank have emerged as successful bidders.

"We will lend Bt80 billion for the first phase," GSB president Woravit Chailimpamontri said yesterday, adding that his bank expected to lend about Bt170 billion to the government for the water-management and prevention modules that are estimated to cost Bt340 billion in total.

Read more:

http://www.nationmultimedia.com/national/Govt-savings-bank-to-lend-Bt80-bn-initially-30206075.html

Borrowing from the GSB and KTB which I understand is also owned by the Govt is in fact borrowing from the savings of the Thai people and from the poorer people and the children as the rich will not have money in savings accounts with either of these banks.

The "emerged as successful bidders" bit would mean that no one else was interested in lending them money so they had to go to Govt banks.

Moody's will be savy enough to know about that as well.

Edited June 4, 2013 by metisdead
To avoid copyright violation, include a link when quoting a news article.

[Thai at Heart]

Heads roll over the embarrassing leaked report of the massive losses incured so far by the rice pledging scam.

BANGKOK, 4 June 2013 (NNT) - Prime Minister Yingluck Shinawatra has instructed the Ministry of Finance to provide Thailands economic information for Moodys before it downgrades the countrys credit rating. Ms Yingluck on Tuesday said she had asked the Ministry of Finance to closely monitor Moodys analysis and confirmed that the government was ready to provide the agency with complete information prior to the rating downgrade. Asked why the government did not clarify the rice pledging schemes loss of profit to the public, the premier said the loss was still unofficial, adding that she had not yet received the loss figures from the Ministry of Commerce. http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5606040010006

Seems that Yingluck isnt disputing that the rice scam is making losses, she is disputing the size of those losses. Based apon some new information that Yingluck has recieved from her finance minister.

BANGKOK, 3 June 2013 (NNT) - Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong declines to comment on Moodys plan to decrease Thailands credit rating after the Thai governments rice pledging scheme made a loss of hundreds of billions of baht.

Mr Kittiratt said at the moment he could not provide information about Thailands credit rating downgrade as he had not yet been informed of the matter in detail. http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5606030010011

Tuesday, Jun 04, 2013......Continuing the programme and bearing further costs would have major credit implications, it said. Previous estimates of losses for the 2011-12 harvest year were equal to 1.0 per cent of gross domestic product, but the current estimate puts the cost at 1.7 per cent of GDP or 7.8 per cent of total expenditure in 2012...... http://news.asiaone.com/News/AsiaOne%BNews/Asia/Story/A1Story20130604-427262.html

Sound like good advice, time to cut your losses...........But This is Thailand.

Wednesday May 29 2013. AS was widely anticipated by the market, Thailand has renewed its rice paddy pledging scheme for a third year, despite the scheme driving up Thai rice prices on the international market and costing the country its previously held position as the world's number one exporter. "We will be continuing with the scheme, with which we aim to go on supporting farmers. At this stage, we see no change in the intervention," said Thai commerce minister Boonson Teriyapirom. http://www.agra-net.com/portal2/pl/home.jsp?template=newsarticle&artid=20018048607&pubid=ag047

Maybe it is just me but some how I don't think Moody's isn't to interested in a Finance Minister who has admitted he lie's and says it is OK. He can try to justify the losses but it will fall on deaf ears.

The issue is, they are now prepared to provide figures only because Moody's did the maths and calculated that the loss is bigger than thought.

Where were these wondrous calculations before because every man and his dog has been saying the same thing for months, but the figures were secret. So come on then, let's put a figure on the value of the stuff in the warehouse?

How much damaged or mouldy?

How much lost because of quality degradation and crop year definition? There will be industry figures available for that for decades.

10% of value? 20% of value? 30% of value?

This will be a very nasty number when they finally disclose it. Based on some new information available from the finance minister? Is he an expert in rice marketing now also?

Edited June 4, 2013 by Thai at Heart

[Robby nz]

Yesterday the MR's showed me a photo on the Thai version of Facebook or Twitter or something of a large rice warehouse with an even larger stack of sacks of rice left outside, apparently rotten.

That will be there for anyone who wants to search.

I understand there is also an Islamic Bank owned by the Govt that is in some trouble.

If this is the case then the hole looks to be getting even deeper.

[waza]

Heads roll over the embarrassing leaked report of the massive losses incured so far by the rice pledging scam.

BANGKOK, 4 June 2013 (NNT) - Prime Minister Yingluck Shinawatra has instructed the Ministry of Finance to provide Thailands economic information for Moodys before it downgrades the countrys credit rating. Ms Yingluck on Tuesday said she had asked the Ministry of Finance to closely monitor Moodys analysis and confirmed that the government was ready to provide the agency with complete information prior to the rating downgrade. Asked why the government did not clarify the rice pledging schemes loss of profit to the public, the premier said the loss was still unofficial, adding that she had not yet received the loss figures from the Ministry of Commerce. http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5606040010006

Seems that Yingluck isnt disputing that the rice scam is making losses, she is disputing the size of those losses. Based apon some new information that Yingluck has recieved from her finance minister.

BANGKOK, 3 June 2013 (NNT) - Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong declines to comment on Moodys plan to decrease Thailands credit rating after the Thai governments rice pledging scheme made a loss of hundreds of billions of baht.

Mr Kittiratt said at the moment he could not provide information about Thailands credit rating downgrade as he had not yet been informed of the matter in detail. http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5606030010011

Tuesday, Jun 04, 2013......Continuing the programme and bearing further costs would have major credit implications, it said. Previous estimates of losses for the 2011-12 harvest year were equal to 1.0 per cent of gross domestic product, but the current estimate puts the cost at 1.7 per cent of GDP or 7.8 per cent of total expenditure in 2012...... http://news.asiaone.com/News/AsiaOne%BNews/Asia/Story/A1Story20130604-427262.html

Sound like good advice, time to cut your losses...........But This is Thailand.

Wednesday May 29 2013. AS was widely anticipated by the market, Thailand has renewed its rice paddy pledging scheme for a third year, despite the scheme driving up Thai rice prices on the international market and costing the country its previously held position as the world's number one exporter. "We will be continuing with the scheme, with which we aim to go on supporting farmers. At this stage, we see no change in the intervention," said Thai commerce minister Boonson Teriyapirom. http://www.agra-net.com/portal2/pl/home.jsp?template=newsarticle&artid=20018048607&pubid=ag047

Maybe it is just me but some how I don't think Moody's isn't to interested in a Finance Minister who has admitted he lie's and says it is OK. He can try to justify the losses but it will fall on deaf ears.

The issue is, they are now prepared to provide figures only because Moody's did the maths and calculated that the loss is bigger than thought.

Where were these wondrous calculations before because every man and his dog has been saying the same thing for months, but the figures were secret. So come on then, let's put a figure on the value of the stuff in the warehouse?

How much damaged or mouldy?

How much lost because of quality degradation and crop year definition? There will be industry figures available for that for decades.

10% of value? 20% of value? 30% of value?

This will be a very nasty number when they finally disclose it. Based on some new information available from the finance minister? Is he an expert in rice marketing now also?

The sum Moody used were the Thai governments own calculations leaked by a deputy finance permanent secretary who has now been reshuffled which estimated losses of up to 260 billion baht so far.

But at least the farmers are benefiting, but are they?

In Thailand’s effort to spin straw into gold, the very people the nation’s rice buying scheme promises to help may be worse off. The Thai Farmers Association is urging the Thai government to set up a paddy quota system to prevent landowners from pushing farmers off their land and hiring wage farmers to work their land. Farmers in Thailand typically don’t own the land they farm..........Farmers are also disgruntled about the government’s flood relief measures. Farmers typically invest about 4,000 to 5,000 baht per rai (about $23 per hectare) and will receive about 2,222 baht per rai (about $11 per hectare) to cover flood damage. The government emphasizes that the compensation is for partial damage, not full damage.

Thai farmers are also frustrated by the fact that if they collect compensation for partial flood damaged they aren’t allowed to sell their remaining rice under the Thai government’s rice buying scheme. http://www.oryza.com/content/thai-farmers-disgruntled-about-government-rice-buying-scheme

So where is all the money going?

Edited June 4, 2013 by waza

[Thai at Heart]

Heads roll over the embarrassing leaked report of the massive losses incured so far by the rice pledging scam.

BANGKOK, 4 June 2013 (NNT) - Prime Minister Yingluck Shinawatra has instructed the Ministry of Finance to provide Thailands economic information for Moodys before it downgrades the countrys credit rating. Ms Yingluck on Tuesday said she had asked the Ministry of Finance to closely monitor Moodys analysis and confirmed that the government was ready to provide the agency with complete information prior to the rating downgrade. Asked why the government did not clarify the rice pledging schemes loss of profit to the public, the premier said the loss was still unofficial, adding that she had not yet received the loss figures from the Ministry of Commerce. http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5606040010006

Seems that Yingluck isnt disputing that the rice scam is making losses, she is disputing the size of those losses. Based apon some new information that Yingluck has recieved from her finance minister.

BANGKOK, 3 June 2013 (NNT) - Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong declines to comment on Moodys plan to decrease Thailands credit rating after the Thai governments rice pledging scheme made a loss of hundreds of billions of baht.

Mr Kittiratt said at the moment he could not provide information about Thailands credit rating downgrade as he had not yet been informed of the matter in detail. http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5606030010011

Tuesday, Jun 04, 2013......Continuing the programme and bearing further costs would have major credit implications, it said. Previous estimates of losses for the 2011-12 harvest year were equal to 1.0 per cent of gross domestic product, but the current estimate puts the cost at 1.7 per cent of GDP or 7.8 per cent of total expenditure in 2012...... http://news.asiaone.com/News/AsiaOne%BNews/Asia/Story/A1Story20130604-427262.html

Sound like good advice, time to cut your losses...........But This is Thailand.

Wednesday May 29 2013. AS was widely anticipated by the market, Thailand has renewed its rice paddy pledging scheme for a third year, despite the scheme driving up Thai rice prices on the international market and costing the country its previously held position as the world's number one exporter. "We will be continuing with the scheme, with which we aim to go on supporting farmers. At this stage, we see no change in the intervention," said Thai commerce minister Boonson Teriyapirom. http://www.agra-net.com/portal2/pl/home.jsp?template=newsarticle&artid=20018048607&pubid=ag047

Maybe it is just me but some how I don't think Moody's isn't to interested in a Finance Minister who has admitted he lie's and says it is OK. He can try to justify the losses but it will fall on deaf ears.

The issue is, they are now prepared to provide figures only because Moody's did the maths and calculated that the loss is bigger than thought.

Where were these wondrous calculations before because every man and his dog has been saying the same thing for months, but the figures were secret. So come on then, let's put a figure on the value of the stuff in the warehouse?

How much damaged or mouldy?

How much lost because of quality degradation and crop year definition? There will be industry figures available for that for decades.

10% of value? 20% of value? 30% of value?

This will be a very nasty number when they finally disclose it. Based on some new information available from the finance minister? Is he an expert in rice marketing now also?

The sum Moody used were the Thai governments own calculations leaked by a deputy finance permanent secretary who has now been reshuffled which estimated losses of up to 260 billion baht so far.

But at least the farmers are benefiting, but are they?

In Thailands effort to spin straw into gold, the very people the nations rice buying scheme promises to help may be worse off. The Thai Farmers Association is urging the Thai government to set up a paddy quota system to prevent landowners from pushing farmers off their land and hiring wage farmers to work their land. Farmers in Thailand typically dont own the land they farm..........Farmers are also disgruntled about the governments flood relief measures. Farmers typically invest about 4,000 to 5,000 baht per rai (about $23 per hectare) and will receive about 2,222 baht per rai (about $11 per hectare) to cover flood damage. The government emphasizes that the compensation is for partial damage, not full damage.

Thai farmers are also frustrated by the fact that if they collect compensation for partial flood damaged they arent allowed to sell their remaining rice under the Thai governments rice buying scheme. http://www.oryza.com/content/thai-farmers-disgruntled-about-government-rice-buying-scheme

So where is all the money going?

They should have had a proper quota system decades ago

[OzMick]

They should have had a proper quota system decades ago

WHY? a free market would be far more efficient with ZERO government loss.

[BlackJack]

how will all this effect the price of my pizza

[rametindallas]

But there is no loss as we still have all rice. What do Bloomberg and the Worldbank say?

Nothing, including that rice, has value until you sell it and prove its worth.

[rametindallas]

I believe Moody's rather than the bullxxxx figures the Govt puts out every day. For those supporters of this scheme (and others) and this Government, open your eyes and see how far down the road to ruin they are taking this country. It won't be long before there is no coming back from it.

Moodys is control by Soros I believe the Government not a month piece for Soros

You, personally, may not believe Soros or Moodys but most investors and governments the World over do and their opinion outweighs yours. lol

[rametindallas]

Moodys intervention may be the first 'reality check' this government can't ignore. They have certainly stifled/ignored any internal reality checks.

[NeverSure]

I don't get the impression that Moody's or any other rating agency digs that deep. I think they get a lot of numbers from the government. I have no confidence that they will audit these banks that are being bled, nor that they will see and inventory all of the rice or put a value on it. For one thing I don't think the Thai government will let them.

Main street world mostly still thinks Thailand is a boom country. Look at the stock market. Look at real estate prices. Look at foreign investment.

Someone is in for a shock and I don't think Moody's will deliver it. I think it will come when real estate prices and the stock market crash because outsiders quit breathing the ether and want their money out of Thailand due to fundamentals.

It's boggling, but portfolio managers follow each other. No one wants to be left behind and be embarrassed by not getting the best returns for investors. So like lemmings they follow the crowd. Right now the crowd is all about Asia. But Asia doesn't pencil. it's too reliant on global economies to buy it's stuff. It's too export reliant but exports are falling due to world economic situations. Add to that corruption and massive debt and deficits by Asian countries who you would think are rolling in dough, and the writing is on the wall. This includes China.

Asia may do well some day, but it's had it's flash in the pan for now and is massively in debt and mismanaged.

Edited June 5, 2013 by NeverSure

[catmac]

They should have had a proper quota system decades ago

WHY? a free market would be far more efficient with ZERO government loss.

Quite right, OzMick. Whenever Governments interfere with the market - however well intentioned they may be - you can be certain that they will turn a bad situation into a disaster. The CAP in Europe was a prime example of well-intentioned stupidity.

Although in general I support PTP over the revolting Dems, I totally deplore the whole rice-pledging scheme, and have done since its first appearance.

[waza]

I don't get the impression that Moody's or any other rating agency digs that deep. I think they get a lot of numbers from the government. I have no confidence that they will audit these banks that are being bled, nor that they will see and inventory all of the rice or put a value on it. For one thing I don't think the Thai government will let them.

Main street world mostly still thinks Thailand is a boom country. Look at the stock market. Look at real estate prices. Look at foreign investment.

Someone is in for a shock and I don't think Moody's will deliver it. I think it will come when real estate prices and the stock market crash because outsiders quit breathing the ether and want their money out of Thailand due to fundamentals.

It's boggling, but portfolio managers follow each other. No one wants to be left behind and be embarrassed by not getting the best returns for investors. So like lemmings they follow the crowd. Right now the crowd is all about Asia. But Asia doesn't pencil. it's too reliant on global economies to buy it's stuff. It's too export reliant but exports are falling due to world economic situations. Add to that corruption and massive debt and deficits by Asian countries who you would think are rolling in dough, and the writing is on the wall. This includes China.

Asia may do well some day, but it's had it's flash in the pan for now and is massively in debt and mismanaged.

After 30 years of neo classical macroeconomics, free market economics with little government regulation. It has let the immoral suck all disposable income from the masses and concentrated it. This mass of money is in the hands of fund managers and money launderers, and its looking for a home that pays a good return.

China is the economic powerhouse of the world at the moment, so an economy close to Chins with little or no check and balances and low taxes. What could be better than a rice republic run by a criminal and his organisation of criminals and thugs.

Hello Thailand

Now that someone leaked some truth, the bright light of international attention has shone upon them, watch them scatter around like cockroaches when their rock is lifted.

Edited June 5, 2013 by waza