BOT chief urges sale of rice from Thai govt stockpiles to fund payment to farmers

[webfact]

BOT chief urges sale of rice from govt stockpiles to fund payment to farmers
Erich Parpart,
Petchanet Pratruangkrai
The Nation

BANGKOK: -- The central bank governor yesterday advised the caretaker government to raise funds by speeding up the sale of rice from the state's stockpiles instead of borrowing to pay farmers taking part in its rice-pledging scheme.

Prasarn Trairatvorakul, governor of the Bank of Thailand, said the pledging scheme had created problems for farmers because they were not being paid and they suffered badly from lack of savings.

"The government should sell rice from the stockpiles as soon as possible ... even if the sales are made at a loss," Prasarn said.

More than a million farmers have not been paid for their pledged paddy in the 2013-14 harvest season, representing 10.71 million tonnes worth a total of Bt167 billion. The farmers have threatened to block roads and stage protest rallies against the government because of the delay in payments.

After the Finance Ministry on Thursday failed to obtain a Bt20-billion short-term loan in the first batch of the Bt130-billion fund planned to finance the rice-pledging project, TMB Bank was reportedly named as the winner of the bid. However, the ministry said none of the financial institutions had won it.

TMB Bank chief executive officer Boontuck Wangcharoen clarified in a statement released yesterday that the bank did not take part in the loan bidding on Thursday.

"The legal risk is not clear. So the process of credit has not yet been considered as more than half of the bank's directors, who are foreigners, are abroad," Boontuck said in a statement.

Kosit Panpiemras, executive chairman of Bangkok Bank, said it did not take part in the loan auction on Thursday, as the law regarding the loan was still unclear. He said commercial banks had to be careful on such matters.

Narongchai Akrasanee, chairman of MFC Asset Management, suggested that the next government should expand the revolving fund for paying for paddy under the scheme once they are in power. Then they can begin to pay the farmers gradually through any banks that are willing, and not only the Bank for Agriculture and Agricultural Cooperatives.

Prasarn said the problem faced by commercial banks in the auction related to the law, which is still unclear, and they were worried that the next government might not honour the deal. However, he said the BOT would not interfere, as it believes commercial banks can deal with it.

Meanwhile, caretaker Commerce Minister Niwatthumrong Boonsongpaisan said China had expressed concerns about the Thai government's ability to supply rice to it under a government-to-government contract. China could cancel the deal. He said that next week he would discuss the matter with the Chinese company involved.

In January, the government sold 1 million tonnes of rice from its total stockpile of 10 million tonnes. There are sales contracts for another 5 million tonnes, which are awaiting shipping.


-- The Nation 2014-02-01

[oldthaihand99]

Or use the 40 billion (plus several years interest), stolen from Tax-in.

Let's say 50 billion.

That would be a good start.

[Robby nz]

But they have been trying to sell it and have only been able to sell less than half of what they have put up for auction.

Now things will be even worse as the have put a cap on what a farmer can sell to the scheme which means any surplus can be bought by a trader direct from the farmer at a lower price.

Now that the farmers haven't been paid there will be more of them selling direct to the mills or traders.

Then there will be some traders who have been buying rice from other countries to satisfy their customers.

Also there has been an increase in production volume which now means the new seasons crop is enough to satisfy the local and the now diminished export marker.

Add all that together and it means the traders, or indeed the world markets, don't need to buy old stock rice from the Govt

[Scamper]

As massive storages of rice remain inert, either caught in limbo between trade deals that were either questionable or non-existent, or simply abandoned in silos - we have the physical embarrassment of the rice scandal laid bare. While many have gotten rich from this debacle through massive, unconscionable graft schemes that ensured mammon at all levels in the chain, one can be sure that one sector did not - the farmers themselves. They have been driven to despair - having been relinquished - without payment - of rice that has no hope of ever being sold. As the administration tries to frantically prescribe blame one day before the election, the farmers realize that they no longer have any savings left - especially to invest in the dubious and deceptive allure of a Pheu Thai campaign jingle.

[trogers]

"The government should sell rice from the stockpiles as soon as possible ... even if the sales are made at a loss," Prasarn said.

He is just repeating a sensible solution that is being requested by desperate farmers - "Give us back our rice so that we can sell it ourselves...".

[Thai at Heart]

Sell to whom? Don't they buy FOB?

If they buy now it's can't be that they pay tomorrow.

[JRSoul]

"..........even if the sales are made at a loss."

Has this whole rotten scheme EVER sold rice at a profit?

[oldthaihand99]

I'll buy a bag. How much?

Let me check with some of my buddies & hotels in BKK. What's the deal?

[spirit47]

Or use the 40 billion (plus several years interest), stolen from Tax-in.

Let's say 50 billion.

That would be a good start.

You mean this...

http://www.forbes.com/profile/thaksin-shinawatra/

[oldthaihand99]

Or use the 40 billion (plus several years interest), stolen from Tax-in.

Let's say 50 billion.

That would be a good start.

You mean this...

http://www.forbes.com/profile/thaksin-shinawatra/

I converted 1.2 billion USD to baht.

Your link opines it's 1.3 billion, which would slightly increase my numbers.

[spirit47]

Or use the 40 billion (plus several years interest), stolen from Tax-in.

Let's say 50 billion.

That would be a good start.

You mean this...

http://www.forbes.com/profile/thaksin-shinawatra/

I converted 1.2 billion USD to baht.

Your link opines it's 1.3 billion, which would slightly increase my numbers.

By the way, that money was not stolen from Taksin, its money that Taksin stolen from Thailand...

[belg]

isnt this what WE here have been saying since the scam begins?

who wants to continue a scam like that? if they just stock it up at high cost, start to rott, unsellabel garbage

and then complain that there is no money

WHO WOULD HAVE PREDICTED THAT ?

[slapout]

The Central Bank Governor would appear to come from the same system that those unconcerned ministers, involved in this scam, come from. He might want to review the 'rice program' , its stock, potential buyers, market price, those involved, etc prior to making such a public ground breaking solution.

[Old Man River]

But they have been trying to sell it and have only been able to sell less than half of what they have put up for auction.

Now things will be even worse as the have put a cap on what a farmer can sell to the scheme which means any surplus can be bought by a trader direct from the farmer at a lower price.

Now that the farmers haven't been paid there will be more of them selling direct to the mills or traders.

Then there will be some traders who have been buying rice from other countries to satisfy their customers.

Also there has been an increase in production volume which now means the new seasons crop is enough to satisfy the local and the now diminished export marker.

Add all that together and it means the traders, or indeed the world markets, don't need to buy old stock rice from the Govt

Robby, it is a question of price. If you pay way above market and try to sell it above market to limit your loss (not mark to market), you can't sell it. If you sell it for what it is worth, you will sell it and generate cash to pay the farmers instead of blaming the E C or the banks who won't lend you money despite the risk free MOF guarantee.

The Thai government will have to remove the bugs being found in some of the exported rice, but this isn't a big issue and can be done. Price it to market, sell it and pay the farmers. It is easy. Then show some of the real loss from the rice program and blame those ugly foreigners for not paying high enough. It's easy.

Sent from my iPad using Thaivisa Connect Thailand

[drand11]

Bottomline, you cant take farmers rice at a prior agreed price and then not pay for it!!

[Ulic]

Of course then the true losses can be calculated. Sell the rice at a loss take your medicine have a proper investigation

with forensic accountants. Charge all those who befitted illegally, send the guilty to jail, and move on.

[Robby nz]

But they have been trying to sell it and have only been able to sell less than half of what they have put up for auction.

Now things will be even worse as the have put a cap on what a farmer can sell to the scheme which means any surplus can be bought by a trader direct from the farmer at a lower price.

Now that the farmers haven't been paid there will be more of them selling direct to the mills or traders.

Then there will be some traders who have been buying rice from other countries to satisfy their customers.

Also there has been an increase in production volume which now means the new seasons crop is enough to satisfy the local and the now diminished export marker.

Add all that together and it means the traders, or indeed the world markets, don't need to buy old stock rice from the Govt

Robby, it is a question of price. If you pay way above market and try to sell it above market to limit your loss (not mark to market), you can't sell it. If you sell it for what it is worth, you will sell it and generate cash to pay the farmers instead of blaming the E C or the banks who won't lend you money despite the risk free MOF guarantee.

The Thai government will have to remove the bugs being found in some of the exported rice, but this isn't a big issue and can be done. Price it to market, sell it and pay the farmers. It is easy. Then show some of the real loss from the rice program and blame those ugly foreigners for not paying high enough. It's easy.

Sent from my iPad using Thaivisa Connect Thailand

Sorry but it is not that easy, if it were it would already have been sold.

Take a look at the world oversupply situation and you will see that the world does not want old Thai rice as there is plenty of new seasons crop from all the worlds producers to satisfy demand.

There is also the question of quality of Thai rice after the Ivory coast had to dump 30% of the lot they bought, The US returning a shipment and the rice given to the old people of Phitsanulok who said it was so rotten the dogs wouldn't eat it.

[Jonmarleesco]

'Prasarn Trairatvorakul, governor of the Bank of Thailand, said the pledging scheme had created problems for farmers ...'

It's created problems for Thailand and its economy, not just the farmers.

'"... The government should sell rice from the stockpiles as soon as possible ... even if the sales are made at a loss ..."

Well, they're hardly going to show a profit, with a commitment to pledge at some 40% above market prices, are they?

'Meanwhile, caretaker Commerce Minister Niwatthumrong Boonsongpaisan said ... China could cancel the deal ...'

I wonder if this is the same deal that was the subject of national security concerns?

And, of course, there is the question of just how much of the rice is still fit for human consumption.

[AleG]

"The government should sell rice from the stockpiles as soon as possible ... even if the sales are made at a loss," Prasarn said.

Yes, because if there's anything left to add to this clusterf##k is a set of international trade sanctions for dumping.

[Old Man River]

But they have been trying to sell it and have only been able to sell less than half of what they have put up for auction.

Now things will be even worse as the have put a cap on what a farmer can sell to the scheme which means any surplus can be bought by a trader direct from the farmer at a lower price.

Now that the farmers haven't been paid there will be more of them selling direct to the mills or traders.

Then there will be some traders who have been buying rice from other countries to satisfy their customers.

Also there has been an increase in production volume which now means the new seasons crop is enough to satisfy the local and the now diminished export marker.

Add all that together and it means the traders, or indeed the world markets, don't need to buy old stock rice from the Govt

Robby, it is a question of price. If you pay way above market and try to sell it above market to limit your loss (not mark to market), you can't sell it. If you sell it for what it is worth, you will sell it and generate cash to pay the farmers instead of blaming the E C or the banks who won't lend you money despite the risk free MOF guarantee.

The Thai government will have to remove the bugs being found in some of the exported rice, but this isn't a big issue and can be done. Price it to market, sell it and pay the farmers. It is easy. Then show some of the real loss from the rice program and blame those ugly foreigners for not paying high enough. It's easy.

Sent from my iPad using Thaivisa Connect Thailand

Sorry but it is not that easy, if it were it would already have been sold.

Take a look at the world oversupply situation and you will see that the world does not want old Thai rice as there is plenty of new seasons crop from all the worlds producers to satisfy demand.

There is also the question of quality of Thai rice after the Ivory coast had to dump 30% of the lot they bought, The US returning a shipment and the rice given to the old people of Phitsanulok who said it was so rotten the dogs wouldn't eat it.

Robby, it is that easy. It is just about cost. It always is. Your arguments are that they should sell it for lower, realizing a larger loss. I fully agree, value for value, but YL is being investigated and quantifying a large loss, regardless of whether it is true, may well not be in her favor. It is always about price.

One friend said forget about selling it and make sake instead.

Sent from my iPad using Thaivisa Connect Thailand

[northernjohn]

"The government should sell rice from the stockpiles as soon as possible ... even if the sales are made at a loss," Prasarn said.

He is just repeating a sensible solution that is being requested by desperate farmers - "Give us back our rice so that we can sell it ourselves...".

Yes

BANGKOK: -- The central bank governor yesterday advised the caretaker government to raise funds by speeding up the sale of rice from the state's stockpiles instead of borrowing to pay farmers taking part in its rice-pledging scheme.

Now why can't the government under stand that. Must be a whing ding economics program at Kentucky some thing university. Probably a diploma mill rather than a real college.

[northernjohn]

But they have been trying to sell it and have only been able to sell less than half of what they have put up for auction.

Now things will be even worse as the have put a cap on what a farmer can sell to the scheme which means any surplus can be bought by a trader direct from the farmer at a lower price.

Now that the farmers haven't been paid there will be more of them selling direct to the mills or traders.

Then there will be some traders who have been buying rice from other countries to satisfy their customers.

Also there has been an increase in production volume which now means the new seasons crop is enough to satisfy the local and the now diminished export marker.

Add all that together and it means the traders, or indeed the world markets, don't need to buy old stock rice from the Govt

Robby, it is a question of price. If you pay way above market and try to sell it above market to limit your loss (not mark to market), you can't sell it. If you sell it for what it is worth, you will sell it and generate cash to pay the farmers instead of blaming the E C or the banks who won't lend you money despite the risk free MOF guarantee.

The Thai government will have to remove the bugs being found in some of the exported rice, but this isn't a big issue and can be done. Price it to market, sell it and pay the farmers. It is easy. Then show some of the real loss from the rice program and blame those ugly foreigners for not paying high enough. It's easy.

Sent from my iPad using Thaivisa Connect Thailand

Sorry but it is not that easy, if it were it would already have been sold.

Take a look at the world oversupply situation and you will see that the world does not want old Thai rice as there is plenty of new seasons crop from all the worlds producers to satisfy demand.

There is also the question of quality of Thai rice after the Ivory coast had to dump 30% of the lot they bought, The US returning a shipment and the rice given to the old people of Phitsanulok who said it was so rotten the dogs wouldn't eat it.

Robby, it is that easy. It is just about cost. It always is. Your arguments are that they should sell it for lower, realizing a larger loss. I fully agree, value for value, but YL is being investigated and quantifying a large loss, regardless of whether it is true, may well not be in her favor. It is always about price.

One friend said forget about selling it and make sake instead.

Sent from my iPad using Thaivisa Connect Thailand

People can laugh all they want but that is probably the best way to minimize the loss.

[khunken]

It's a sensible suggestion except for actually finding buyers.

They can sell it for local consumption but as there is currently no shortage of rice available for consumers, they would have to discount it. Good for consumers but how much rice can the local market take?.

They can't sell it on world markets because it's too expensive and if they lower the price to the market they are dumping and competitors will have the WTO on the job.

Obviously a conundrum that can only be solved by the runaway genius who designed the scheme.

[oldthaihand99]

Or use the 40 billion (plus several years interest), stolen from Tax-in.

Let's say 50 billion.

That would be a good start.

You mean this...

http://www.forbes.com/profile/thaksin-shinawatra/

I converted 1.2 billion USD to baht.

Your link opines it's 1.3 billion, which would slightly increase my numbers.

By the way, that money was not stolen from Taksin, its money that Taksin stolen from Thailand...

If the 2.3 billion USD was stolen from LOS, why did LOS already give him back 1 billion?

And why aren't they giving the rest back to LOS, e.g. the owed farmers?

By the way, here's how things are shaping up:

http://www.atimes.com/atimes/Southeast_Asia/SEA-02-300114.html

Edited February 1, 2014 by oldthaihand99

[Old Man River]

It's a sensible suggestion except for actually finding buyers.

They can sell it for local consumption but as there is currently no shortage of rice available for consumers, they would have to discount it. Good for consumers but how much rice can the local market take?.

They can't sell it on world markets because it's too expensive and if they lower the price to the market they are dumping and competitors will have the WTO on the job.

Obviously a conundrum that can only be solved by the runaway genius who designed the scheme.

The runaway genius in Dubai or the chairwoman in Bangkok/CM who will pay the price for this ill-fated Thai program?

Sent from my iPad using Thaivisa Connect Thailand

[oldthaihand99]

Take a look at the world oversupply situation and you will see that the world does not want old Thai rice as there is plenty of new seasons crop from all the worlds producers to satisfy demand.

Lovers of aged mouldy stinky cheeses may be in the market for this rice. And those who enjoy fine wines bottled in 1492 & 1776.

[DGIE]

But they have been trying to sell it and have only been able to sell less than half of what they have put up for auction.

Now things will be even worse as the have put a cap on what a farmer can sell to the scheme which means any surplus can be bought by a trader direct from the farmer at a lower price.

Now that the farmers haven't been paid there will be more of them selling direct to the mills or traders.

Then there will be some traders who have been buying rice from other countries to satisfy their customers.

Also there has been an increase in production volume which now means the new seasons crop is enough to satisfy the local and the now diminished export marker.

Add all that together and it means the traders, or indeed the world markets, don't need to buy old stock rice from the Govt

Robby, it is a question of price. If you pay way above market and try to sell it above market to limit your loss (not mark to market), you can't sell it. If you sell it for what it is worth, you will sell it and generate cash to pay the farmers instead of blaming the E C or the banks who won't lend you money despite the risk free MOF guarantee.

The Thai government will have to remove the bugs being found in some of the exported rice, but this isn't a big issue and can be done. Price it to market, sell it and pay the farmers. It is easy. Then show some of the real loss from the rice program and blame those ugly foreigners for not paying high enough. It's easy.

Sent from my iPad using Thaivisa Connect Thailand

My friend asked this question:

What was corrupted in the rice-pledging scheme when the rice is in warehouses? That means the rice is not yet become money and the government is losing when they sell the rice in market price because the government promised to pay 50% higher than market price to the farmers?

Had the government pocketed the amount that should have used to pay farmers?

[Old Man River]

But they have been trying to sell it and have only been able to sell less than half of what they have put up for auction.

Now things will be even worse as the have put a cap on what a farmer can sell to the scheme which means any surplus can be bought by a trader direct from the farmer at a lower price.

Now that the farmers haven't been paid there will be more of them selling direct to the mills or traders.

Then there will be some traders who have been buying rice from other countries to satisfy their customers.

Also there has been an increase in production volume which now means the new seasons crop is enough to satisfy the local and the now diminished export marker.

Add all that together and it means the traders, or indeed the world markets, don't need to buy old stock rice from the Govt

Robby, it is a question of price. If you pay way above market and try to sell it above market to limit your loss (not mark to market), you can't sell it. If you sell it for what it is worth, you will sell it and generate cash to pay the farmers instead of blaming the E C or the banks who won't lend you money despite the risk free MOF guarantee.

The Thai government will have to remove the bugs being found in some of the exported rice, but this isn't a big issue and can be done. Price it to market, sell it and pay the farmers. It is easy. Then show some of the real loss from the rice program and blame those ugly foreigners for not paying high enough. It's easy.

Sent from my iPad using Thaivisa Connect Thailand

My friend asked this question:

What was corrupted in the rice-pledging scheme when the rice is in warehouses? That means the rice is not yet become money and the government is losing when they sell the rice in market price because the government promised to pay 50% higher than market price to the farmers?

Had the government pocketed the amount that should have used to pay farmers?

Your friend will have to ask the experts in the government. I don't know, but am being told that the longer rice stays in silos and hangars, the more it deteriorates and the less value it has.

Sent from my iPad using Thaivisa Connect Thailand

[sean in udon]

"BOT chief urges sale of rice from govt stockpiles to fund payment to farmers"

WOW! Sell the rice to pay the people who made the rice.

The BOT chief must have come top of his class in economics.

[aimbc]

"The government should sell rice from the stockpiles as soon as possible ... even if the sales are made at a loss," Prasarn said.

He is just repeating a sensible solution that is being requested by desperate farmers - "Give us back our rice so that we can sell it ourselves...".

Yes, the farmers want their rice back. But what they failed to understand is that the government has already sold the new crop as the old crop no one wants. So they have no rice to give back. Which makes it a greater fraud by the government.