Commerce Minister: Chinese company might tear up rice purchase contract made with Thailand

[Old Man River]

Why? Something illegitimate about this contract that cannot see the light of day?

From what I remember, China was trading undefined services for the railroad system in exchange for rice. Since the USD 2.2 trillion project is delayed, it is possible that the contract is delayed and could void the contract. At least this is what I remember from what the Caretaker government was wiling to publicly disclose.

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But this would mean no money would ever be paid out by the buyer as it is just a contract for services in exchange for rice...

So report A is worth 1m tonnes of rice and so on?

Could be. Not sure. But if no money changes hands, it can be booked value on the books for value agreed upon (no loss quantified). Again, I have never seen it quantified and doubt you have either. My view is/has been that such contracts make sense. Estimations of loss has been approx. THB 400 + billion. If the rice is sold for a certain non quantifiable amount, then the potential quantifiable loss can be made less.

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[Old Man River]

Why? Something illegitimate about this contract that cannot see the light of day?

From what I remember, China was trading undefined services for the railroad system in exchange for rice. Since the USD 2.2 trillion project is delayed, it is possible that the contract is delayed and could void the contract. At least this is what I remember from what the Caretaker government was wiling to publicly disclose.

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But this would mean no money would ever be paid out by the buyer as it is just a contract for services in exchange for rice...

So report A is worth 1m tonnes of rice and so on?

I'm afraid Old Man River's memory is not what it maybe was.

The B2.2tn - not US$ - loan was supposed to be for infrastructure upgrades and development, part of which is for the HSR projects. The Thai government has said it is negotiating with China (more propaganda than fact) to barter rice for HSR. China has never agreed publicly.

There has been more lies about supposed G-to-G deals than has actually taken place. The one in the Op is probably more fictitious than real.

I meant THB 2.2 trillion, but am happy to blame my memory for such a dumb mistake.

Ok, infrastructural projects (the railroad project being by far the largest) for rice. If this isn't about rice, then what commodity other than rice does this article relate to?

http://thainews.prd.go.th/centerweb/newsen/NewsDetail?NT01_NewsID=WNECO5701310010011

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[Ricardo]

Just to point out that, the article doesn't mention the infrastructure-plans, so would appear to be a totally different deal ?

[Robby nz]

When the Chinese premiere was here he was up on a stage with Yingluck signing a MOU for 1 million tons of rice and shaking hands on the deal.

Then the next day Yingluck came out and said the deal had been raised to 5 million tons, no confirmation from China.

Now a MOU is not a contract only an agreement in principal and if the OP is alluding to that MOU then it never was a contract.

Remember reading at the time that there had been another MOU singed with China 2 years before which had never been followed up and some official saying that they would be pressuring the Chinese Govt on that MOU.

Heard nothing more.

Not surprising, pressure the Chinese, down on their knees with wais and please, please.

[MaxLee]

"Dear little brother S( C)HINA~WATRA, we're gonna bail you out,....

.... naaaaaahhhhhhh just kidding!!!!!! KID-DDDTTTIIIIIING!!!!!!!!!

'cause the real China has it's own world domination to take over....

[tingtongteesood]

Only four companies took part in bidding to buy rice under the scheme on Tuesday, Nov 19. 2013 The companies are Royal Richy Rice, Capital Serial, Asia Golden Rice and Charoen Pokphand... Charoen Pokphand (coincidentally or not) . a private company Part of the C.P Group and coincidentally ( or not) one of the Independent Directors of which Is Abhiset's father...[follow the money] this is part of a much bigger power play to discredit whomever they want whenever they want... this is all intended to make Yluck look even worse... she had nothing to do with this part of it these are the real string pullers here in ASIA... this has only to do with discrediting her...nothing more...this is not face brokered this is all back room brokered and Marks pop and the rest of the Independent and not independent Directors of Charoen Pokphand .. . which incidentally is a private company ..not Thai government... besides India and Vietnam give them better deals. Thai Rice is too pricy...but that is not what this is about... it is smear tactic pure and simple...

What a load of drivel. Yes Abisit's dad is one of the CP guys, what does that have to do with the fake China deal ? ABSOLUTELY NOTHING !

[Dogmatix]

It's funny that the only reference to the Pei Ta Hwang company on Google is the Commerce Minister's quote. Must be a very secretive company.

[ableguy]

From day one this so called "contract" has been a problem.

That any contract really even existed, that there were a shipping documents or invoices, and even if the supposed rice ever really existed to be shipped has never really been independently proved.

The whole deal stinks to high heaven, and really needs a detailed and unbiased investigation.

I don't think that's going to happen with this government in power.

Now it appears the Chinese are not just walking away from the deal, they're running away as fast as they can run.

The Chinese are not fools, and they are leaving the sinking ship as quickly as possible.

My understanding is the Chinese companies were set up by Thailand and are bogus, the company paid for rice at a low secret price but it never left thailand! the rice was then sold back to the government at the full pledging price. According to the national anti corruption committee , hundreds of millions stolen.

[ableguy]

Piece in the Nation yesterday said that a Chinese state owned enterprise was considering the purchase of one million tons of rice but that it may back out because of the investigation. Now some here are reading this as the Chinese being involved in some sort of corruption in the deal and not wanting a light shone on it. Not impossible. But there's a perhaps simpler explanation: most countries / companies would naturally not want to enter a contract when there is some doubt as to whether the other side will be able to meet it's part of the deal. The body doing the investigation could, for example, put the brakes on sales of rice after the Chinese company had paid some amount... So there's real risk involved for them. This sort of uncertainty is always bad. One doesn't need to invoke/assume corruption on the part of the Chinese (or even the Thais) for this to be a problem. It's all about uncertainty and the risk associated with it. The other problem the thai government is having is that it has to be careful not to sell too much rice at one time or it risks suppressing market prices. So it cannot rely on quick sales alone to pay farmers... Instead, rice needs to be released in a more regular flow and farmers need to be paid from other reserves until the money comes in from sales. It's a risky and delicate balancing act, and near impossible to manage when there's such political instability. And of course it's the poor farmers that feel the pain.

total B?????sh....t

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[Robby nz]

I see some numbers have come to light in an article from elsewhere this morning.

The Thai Development Research Institute has estimated the total debt from one year pledging at 350 billion B.

This includes 21 billion B for interest on borrowing alone at 3%.

There is also storage and handling costs of 90 billion B.

And it is estimated that quality is reduced by 10% for every year the rice is stored.

With that sort of deterioration there is little wonder nobody wants it.

[MaiChai]

Convenient? Why would the Chinese buy from Thailand when they can it much cheaper from their Vietnamese neighbour? Sounds fishy to me.

[jaidam]

Only four companies took part in bidding to buy rice under the scheme on Tuesday, Nov 19. 2013 The companies are Royal Richy Rice, Capital Serial, Asia Golden Rice and Charoen Pokphand... Charoen Pokphand (coincidentally or not) . a private company Part of the C.P Group and coincidentally ( or not) one of the Independent Directors of which Is Abhiset's father...[follow the money] this is part of a much bigger power play to discredit whomever they want whenever they want... this is all intended to make Yluck look even worse... she had nothing to do with this part of it these are the real string pullers here in ASIA... this has only to do with discrediting her...nothing more...this is not face brokered this is all back room brokered and Marks pop and the rest of the Independent and not independent Directors of Charoen Pokphand .. . which incidentally is a private company ..not Thai government... besides India and Vietnam give them better deals. Thai Rice is too pricy...but that is not what this is about... it is smear tactic pure and simple...

What a load of drivel. Yes Abisit's dad is one of the CP guys, what does that have to do with the fake China deal ? ABSOLUTELY NOTHING !

Dear Oh dear I have read some naive and ill-considered remarks on this forum but this Abhisit's father/CP director/Shinawatra rice ripoff linkage is pushing new boundaries. Dirt farmer, you might like to research who Yingluck's official boyfriend and father of her son(I'm not talking about Sretta Taveesin here) works for and is a director at.

While we are on the subject of wildly speculative conspiracy theories you might want to look at the link between Yingluck, Sretta, Nalinee and finally uncle Bob Mugabe. Oh wait that one is not a conspiracy theory its just the way that dictators behave to launder their cash stolen from their country.

[manarak]

Funny timing for a probe into rice sales.

I guess the kickbacks don't flow into the right pockets.

[JRSoul]

Funny timing for a probe into rice sales.

I guess the kickbacks don't flow into the right pockets.

Can you suggest a better time?

[manarak]

Funny timing for a probe into rice sales.

I guess the kickbacks don't flow into the right pockets.

Can you suggest a better time?

actually, no.

I didn't say the timing is bad, it's just interesting!

[Docno]

Piece in the Nation yesterday said that a Chinese state owned enterprise was considering the purchase of one million tons of rice but that it may back out because of the investigation. Now some here are reading this as the Chinese being involved in some sort of corruption in the deal and not wanting a light shone on it. Not impossible. But there's a perhaps simpler explanation: most countries / companies would naturally not want to enter a contract when there is some doubt as to whether the other side will be able to meet it's part of the deal. The body doing the investigation could, for example, put the brakes on sales of rice after the Chinese company had paid some amount... So there's real risk involved for them. This sort of uncertainty is always bad. One doesn't need to invoke/assume corruption on the part of the Chinese (or even the Thais) for this to be a problem. It's all about uncertainty and the risk associated with it. The other problem the thai government is having is that it has to be careful not to sell too much rice at one time or it risks suppressing market prices. So it cannot rely on quick sales alone to pay farmers... Instead, rice needs to be released in a more regular flow and farmers need to be paid from other reserves until the money comes in from sales. It's a risky and delicate balancing act, and near impossible to manage when there's such political instability. And of course it's the poor farmers that feel the pain.

total B?????sh....t

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Could you elaborate please? Or is this what passes for intelligent debate in your house?