weak thai baht please, NO WEAKER

[SailingHome]

A weaker baht does affect the locals since the cost of imported goods is higher plus it means higher inflation.ultimately they will pay more as a result.

Ultimately, yes. My point was that it takes time and many other influences affect local price paid with local income. By the time prices change, seldom can a worker say, "Oh, the Baht is weak against foreign money so I have to pay more for my _____." Cost averaging, existing inventory, competition with others ignorant to rising prices, etc... too complex for the average citizen to see why. They just know prices change. What hurts are the sudden price changes that are drastic for basic goods. It happened with groceries when I was in college and seriously impacted quality of living and fun. Yet government cost of living never reflected it, perhaps because to them, basic needs are not the economy and those that subsist are a burden, not a society.

[FiftyTwo]

A weaker baht does affect the locals since the cost of imported goods is higher plus it means higher inflation.ultimately they will pay more as a result.

Ultimately, yes. My point was that it takes time and many other influences affect local price paid with local income. By the time prices change, seldom can a worker say, "Oh, the Baht is weak against foreign money so I have to pay more for my _____." Cost averaging, existing inventory, competition with others ignorant to rising prices, etc... too complex for the average citizen to see why. They just know prices change. What hurts are the sudden price changes that are drastic for basic goods. It happened with groceries when I was in college and seriously impacted quality of living and fun. Yet government cost of living never reflected it, perhaps because to them, basic needs are not the economy and those that subsist are a burden, not a society.

i think comparing prices in a country where almost all food is imported with a country where all food is home grown, may give a false indication of price rises due to currency strength.

the uk makes nothing.

thailand grows everyting.

[FiftyTwo]

A related thread that talks about the price of diesel being increased by 25% thus loosing its subsidy, if when that happens the price of everything will increase.

http://www.thaivisa.com/forum/topic/691433-diesel-prices-set-to-rise/#entry7198401

Yup Absolutely everything is dependent on energy. If energy were free worldwide, everything would be, basically, free. Ponder that a while.

nobody makes stuff for free.

energy price is irrelevant, everyone charges the maximum they can.

if energy were free, corporate profits would rise, nothing would get cheaper.

[Noi657]

Apart from the Thai elite, what does the average joe import into Thailand? Very little I bet. So if you are one of the Thai elite, prices won't really affect you. Mam and pap in the village won't be losing sleep over it that's for sure!

[Noi657]

Oh and "fifty two" agree with you 100% when the energy prices come down for the corporations! does the consumer etc see a decrease in costs? Do the <deleted>!

[chiang mai]

Apart from the Thai elite, what does the average joe import into Thailand? Very little I bet. So if you are one of the Thai elite, prices won't really affect you. Mam and pap in the village won't be losing sleep over it that's for sure!

It's not a case of what the average joe imports, it's a case of what goods are imported that the average joe buys/needs/uses, the list is extensive and far exceeds the value of goods that are exported.

http://countries.bridgat.com/Top_Products_Imported_by_Thailand.html

[FiftyTwo]

Apart from the Thai elite, what does the average joe import into Thailand? Very little I bet. So if you are one of the Thai elite, prices won't really affect you. Mam and pap in the village won't be losing sleep over it that's for sure!

It's not a case of what the average joe imports, it's a case of what goods are imported that the average joe buys/needs/uses, the list is extensive and far exceeds the value of goods that are exported.

http://countries.bridgat.com/Top_Products_Imported_by_Thailand.html

All that stuff comes from China, western currency exchange rates are irrelevant to most Thai imports, used by Thai people.

[chiang mai]

All that stuff comes from China, western currency exchange rates are irrelevant to most Thai imports, used by Thai people.

Anyone can say those things Tommo AOA Fifty Two but you need to be able to substantiate your claim with some kind of proof or link, do all those things on that list, all 1,000 of them come from China, hmmm, I doubt it very much. Are exchange rates irrelevant to rural Thai's? They use many if not nearly all things on that list hence they are affected by a devaluation of THB and the following inflation - such folks use electricity and drive vehicles that require diesel/fuel, the steel they use to build their homes comes from overseas, the fans/air con/water pumps are all made from components that come from overseas, and so on and so on. Don't just say it's so, prove it or at least substantiate your claim, otherwise the claim is meaningless.

EDIT: here's the link showing the difference between imports and exports.

http://www.tradingeconomics.com/thailand/balance-of-trade

Edited December 24, 2013 by chiang mai

[wilcopops]

The weaker THB means more money in volume from every country. Into Thailand through every specter, export, tourism, foreign investment, more money gets around to the working people not just the ultra rich Bankok Elite.

For example the family who could afford maybe a two week vacation is more likely to spend more money on a three week vacation. That thai furniture is now affordable and competitive in overseas markets. And every agricultural product in Thailand competes with Cambodia,Myanmar Laos, now all those products are more competitive in the foreign market and will sell better. Everything made in Thailand becomes a better competitor on the foreign Market.

For example Thai Silp a 70 yo silk exporter with over 2000 employees was forced to close because it was no longer competitive on the open market, this happened with hundreds of very well known and quality Thai companies....I think 40 THB to the Dollar is a good equitable exchange rate on the open market.

At 30 THB to the dollar the only people making money are people worth millions of THB doing day trading on the stock market. That's a fact.....

How much more competitive will these exports become?

The local components get cheaper in baht but the imported component gets more expensive in baht.

Give with one and take with the other.

This process is of course not evenly balanced.......Thailand is reliant of exports for its income so a cheap baht benefits the larger sector. Thailand still has relatively cheap labour, this is an internal resource and coupled with a largely export economy, it reinforces the benefits of a cheap baht.

A company I worked for employing 3500 souls nearly went under a few years back with the Western crisis and strengthening baht.....their product was 100% export (it put about 30% on the cost of their products). Happy to say that with some severe "streamlining" they are now back in profit, but they will always welcome any reduction in the value of the baht.

the motor industry is the 9th largest in the world and exists largely on exports - rather than importing parts for assembly,t hey are increasingly manufactured here too,, again a reason for a cheap baht.

At present the baht has lost about 5% of it's value....the political situation is unlikely to help it rise....so the overall international perception is of a country that over the next few months couldn't organised a piss-up in the brewery, which is quite a different kettle of fish.

Of course. But of course fuel which is imported for example has an effect on both the exported price and the consumer because he can be an end consumer.

I would hope that the bank of Thailand knows the inflationary effects of 1 baht change in the value of the baht to USD.

It's not entirely true to say the larger sector benefits. GDP is made up of c+I+g(x-m). Exports are just one of 5 parts.

I read up quite a lot about the car industry and whilst the pick ups have a lot of local components cars much less so and also as an example most of the steel is imported. At the end that comparison is also skewed because the transfer pricing mechanism hides a myriad of sins.

The ex factory price of a Toyota from Thailand barely registers a blip in the dealership.

Exports may get a boost but who benefits if all the employees in the export sector have to pay more for fuel to get to work for example? Productivity improvements are needed to get the country moving more than devaluing the currency, as your explanation of the company you quoted.

It is unlikely that employees will notice the change in fuel as it is subsidised and fixed at 30 baht for diesel.

thailand also has a massive petrochemical industry that like so many industries in Thailand creates value-added products which it in turn exports and so is cushioned from the added cost on fuyel....if that actually occurs.

[wolfmanjack]

All that stuff comes from China, western currency exchange rates are irrelevant to most Thai imports, used by Thai people.

Anyone can say those things Tommo AOA Fifty Two but you need to be able to substantiate your claim with some kind of proof or link, do all those things on that list, all 1,000 of them come from China, hmmm, I doubt it very much. Are exchange rates irrelevant to rural Thai's? They use many if not nearly all things on that list hence they are affected by a devaluation of THB and the following inflation - such folks use electricity and drive vehicles that require diesel/fuel, the steel they use to build their homes comes from overseas, the fans/air con/water pumps are all made from components that come from overseas, and so on and so on. Don't just say it's so, prove it or at least substantiate your claim, otherwise the claim is meaningless.

EDIT: here's the link showing the difference between imports and exports.

http://www.tradingeconomics.com/thailand/balance-of-trade

I did not read the whole list but most of the stuff at the top will have no affect on the average thai. They are components that are not purchased on a daily or even yearly basis by anyone that can not afford the new model of electronics or vehicle,

Also the imported components are usually a small % of the total sale price of the products.

[tingtong]

Inflation has been on a tear in Thailand these last 3 or 4 years with an extremely strong baht.

5 years ago, 3 large chang classic with a bucket of ice was 129bht.

Today it's 139bht ........ not much inflation there.

Diesel 30bht, same now.

Gas cylinder 300bht, 320bht last week.

I'm not seeing this inflation, where are you guys shopping?

based on my "selfish" math, i beg to differ.

i am here since 2002,

in that year 1 US$ = 43.7 thb...

and 1 plate fried rice in a simple restaurant 20-25thb

a Big Mac menu in McDonalds 89thb...

1L diesel 12thb

1 regular bus ticket 5thb (in Bkk)

now,

1 US$ = 32.5thb ( and it is way way better than getting 28ish!)

and my plate of fried rice is 40-45thb.

a Big Mac menu is 145thb...

1L (bio)diesel 30thb

1 bus ticket 10thb ( same bus)

in the meantime my US$ based salary stayed generally unchanged, but hey, one can be lucky to have a job, right?

so, all i see/feel that with a strengthening baht there was still a considerable level of inflation

in face of all this, silly me, think that for me a very welcome change a little weaker baht!! and i am sure that most expats feel the same!

[chiang mai]

All that stuff comes from China, western currency exchange rates are irrelevant to most Thai imports, used by Thai people.

Anyone can say those things Tommo AOA Fifty Two but you need to be able to substantiate your claim with some kind of proof or link, do all those things on that list, all 1,000 of them come from China, hmmm, I doubt it very much. Are exchange rates irrelevant to rural Thai's? They use many if not nearly all things on that list hence they are affected by a devaluation of THB and the following inflation - such folks use electricity and drive vehicles that require diesel/fuel, the steel they use to build their homes comes from overseas, the fans/air con/water pumps are all made from components that come from overseas, and so on and so on. Don't just say it's so, prove it or at least substantiate your claim, otherwise the claim is meaningless.

EDIT: here's the link showing the difference between imports and exports.

http://www.tradingeconomics.com/thailand/balance-of-trade

I did not read the whole list but most of the stuff at the top will have no affect on the average thai. They are components that are not purchased on a daily or even yearly basis by anyone that can not afford the new model of electronics or vehicle,

Also the imported components are usually a small % of the total sale price of the products.

I recommend reading the entire list to appreciate the full picture.

http://countries.bridgat.com/Top_Products_Imported_by_Thailand.html

Edited December 25, 2013 by chiang mai

[wilcopops]

Inflation has been on a tear in Thailand these last 3 or 4 years with an extremely strong baht.

5 years ago, 3 large chang classic with a bucket of ice was 129bht.

Today it's 139bht ........ not much inflation there.

Diesel 30bht, same now.

Gas cylinder 300bht, 320bht last week.

I'm not seeing this inflation, where are you guys shopping?

based on my "selfish" math, i beg to differ.

i am here since 2002,

in that year 1 US$ = 43.7 thb...

and 1 plate fried rice in a simple restaurant 20-25thb

a Big Mac menu in McDonalds 89thb...

1L diesel 12thb

1 regular bus ticket 5thb (in Bkk)

now,

1 US$ = 32.5thb ( and it is way way better than getting 28ish!)

and my plate of fried rice is 40-45thb.

a Big Mac menu is 145thb...

1L (bio)diesel 30thb

1 bus ticket 10thb ( same bus)

in the meantime my US$ based salary stayed generally unchanged, but hey, one can be lucky to have a job, right?

so, all i see/feel that with a strengthening baht there was still a considerable level of inflation

in face of all this, silly me, think that for me a very welcome change a little weaker baht!! and i am sure that most expats feel the same!

Rise in COL is not the same as inflation

Capitalism requires some inflation for it to work.