Afet bids for Thai govt rice come in low amid high supply

[webfact]

RICE BIDING
Afet bids for govt rice come in low amid high supply
Petchanet Pratruangkrai
The Nation


Officials prepare documents for interested parties to submit their bids for 227,000 tonnes of rice through the Agricultural Futures Exchange of Thailand

Impact on market prices seen; ministry plans more auctions via futures market

BANGKOK: -- A total of 17 traders joined the Commerce Ministry's auction yesterday of 227,000 tonnes of rice via the Agricultural Futures Exchange of Thailand, but their low bids are expected to drag down the market price because of supply exceeding demand.

The turnout has encouraged the Commerce Ministry to schedule another tender for 200,000 tonnes of rice in the futures market on February 26.

The ministry plans to release stocks two or three times a month through the futures market this year.

The sale yesterday of white rice and jasmine rice was the second in the futures market this year, after 58,900 tonnes auctioned last month.

Somchart Soithong, director-general of the ministry's Internal Trade Department, said the auction was expected to generate Bt1 billion. White rice was bid at Bt1.70-Bt3.49 per kilogram lower than the market price for delivery. Jasmine rice was Bt1.72-Bt4.73 a kilo lower than the market price.

Khao Hom Patum rice is currently quoted at Bt14 per kilo and jasmine rice at Bt27-Bt28, while white rice fetches Bt11-Bt12 per kilo. This means the government would receive only Bt8.50 per kilo if the market price is Bt12 on the delivery date.

However, Somchart said the government should earn about Bt12-Bt13 per kilo of rice from this auction. In the next round, the offered price should increase, as traders would have more demand for rice outside of the harvest season next month.

The department reported that the four auctions on the Afet last year could move a total of 186,000 tonnes of rice, generating Bt2 billion. The government should continue to raise money to pay farmers in the near future from selling its rice through various channels including the futures market and public auctions.

The department has insisted that it will continue pushing the plan for rice millers to extend soft loans to farmers. The plan has been proposed to the Cabinet for approval of the budget of Bt1.2 billion to pay the interest on the loans to the millers.

The Election Commission is also considering whether the plan could be carried out during the caretaker government.

A rice trader in the Afet said the bids in the futures market were quite low as the market knows that the government needs to release rice from its inventory urgently to generate money to pay farmers under the rice-pledging scheme.

Traders also know that the government sold rice at very low price in the previous sale of 850,000 tonnes at only Bt9.5-Bt11 a kilo, so the marker price for white and jasmine rice is seen as dropping gradually.

A Commerce Ministry source said the 460,000 tonnes of rice put up at the public auction on Wednesday was likely only half sold. The successful bidders would be revealed today. Ten of the 18 traders submitting bids that day were qualified.

-- The Nation 2014-02-14

[TVGerry]

In other words, we tax payers can expect billions in losses to occur from the overstocked rice. So nice to see our hard earned tax dollars at work. Thanks PTP!

[Red Snake]

This damn rice scheme backfired on them.

[soundman]

50 Satang to the Baht on some current rice stocks which were pledged at nearly double the current market price.

Guess the market just doesn't place much value on Thai rice any more.

A superb example of Thaksinomics if I have ever seen one.

[rogerdee123]

Is anyone surprised? I mean besides the Govt who believes in fantasyland economics.

[notmyself]

Put the rice on eBay with a lucky dip price of 10 Baht for a 1KG bag. Availability :18,000,000,000

[chainarong]

The horse has bolted ,Thailand will have to take the price that's offered, egg on the face of the PTP , but they will blame everything but themselves , step down from office Caretaker PM Yingluck ,take your scrawny crowd with you , offer the hand of piece (you all stuffed up to coin a phrase) leave and let the good people of Thailand in piece.

[PaullyW]

In other words, we tax payers can expect billions in losses to occur from the overstocked rice. So nice to see our hard earned tax dollars at work. Thanks PTP!

Particularly nice for us farangs who pay far more tax than 95% of the Thai populace but who get absolutely <deleted> for it. No rights. Little respect and acknowledgement. Almost nothing.

[JRSoul]

Guessing the name of the last farmer to be paid will be difficult, but his post code will likely be 90110 (Hat Yai) or similar. At current rates of rice sales, his cheque should arrive on or about the 4th of Never.

[tomacht8]

What an economic disaster.

45% paid above the market price in purchasing.

20% realized below the market price in the sale.

Commercial incompetence coupled with stupidity and greed.

[slapout]

The AG bank mentioned 29,000 baht/ton as the cost of the rice program to the taxpayer, several months ago. The farmers were complaining they were only realizing 9 to 14 baht/ton on the paper given them, for payment in the future.The traders say last sale only neted 9.5 to 11 baht/ton. Commerce says only 1/2 of rice offered was sold and that 45% of the potential bidders were not qualified to bid.

Now add to this, that the caretaker goverment is attempting to sell rice on the "futures market" to get rid of the huge, small, or where is it, whose warehouse owners are being paid for the priviledge of storing, safe from theft, fire, vermin, etc, this valuable commidity. And people wonder why the government is being asked/pressured to step down.

[Jeremy50]

Naive,stupid,dishonest,arrogant.

[seajae]

how many farmers are now wishing they had stuck with the dems and there method of payments, not as much but guaranteed to get it. Unfortunately the farmers greed simply took over and all they saw were dollar(baht) signs and they are now paying for that greed, sometimes a bird in the hand is worth more than 2 in the bush. The dem method was far superior and farmers were happy with it, thaksin simply appealed to their greed and won, lets hope this sorts itself out and can go back to what the dems had in place fair for all thais and not simply a pork barrelling to garner votes like this scam.

[siampolee]

As predicted by many a poster here, the inevitable has happened.

[JesseFrank]

while white rice fetches Bt11-Bt12 per kilo. This means the government would receive only Bt8.50 per kilo if the market price is Bt12 on the delivery date.

However, Somchart said the government should earn about Bt12-Bt13 per kilo of rice from this auction.

Says it all, doesn't it, they can't even stop telling porkies when it is written black on white.

In the next round, the offered price should increase, as traders would have more demand for rice outside of the harvest season next month.

Yeah we know, next month everything will be solved as always. Gets boring listening to that broken record.

[RubbaJohnny]

In other words, we tax payers can expect billions in losses to occur from the overstocked rice. So nice to see our hard earned tax dollars at work. Thanks PTP!

Particularly nice for us farangs who pay far more tax than 95% of the Thai populace but who get absolutely <deleted> for it. No rights. Little respect and acknowledgement. Almost nothing.

Is anyone forcing you here?

Can I live in your country as easily as here,Will 800,000k retirement visa be freely available with 30 baht medicine.What acknowledgement do you expect from Thailand ?

I think you know the answer,isn't it so much better here,if you don't like it why not leave unlike most of the poor whom you disparage with coarse <deleted> language .It is somewhat colonial to expect them to ctually like you as well as pay you.Falangs are servants the sooner that sinks in the better,immigration has and will change its regulations a whim.

[Emster23]

"Afet bids for govt rice come in low amid high supply"

Duh. High school economics taught here? Supply and demand? This hare brained scheme accomplished several noteworthy things: lowered supply while government warehouses filled up (thus raising prices paid for those others who were not part of that boondoggle); now oversupply released will lower prices all around; and helped make Thailand no longer #1 rice exporter. 3 in 1 palm oil for those who don't actually make a living doing work, like raising rice for instance.

[Scamper]

" The Election Commission is also considering whether the plan could be carried out during the caretaker government. "

It is very odd when something as fundamental as that is relegated to such an apparently minor mention in a news story. But it's front and centre. Yingluck is presently engaged in a make-believe administration, making all sorts of unrealistic promises - but it has no power. The administrations's unilateral, daily actions to somehow skirt around the constitution in ever more imaginative ways will all flounder at the steps of the courts.

[mightyatom]

This is unfolding like I have predicted and stated several times on this forum.

The price is going down steadily in the global market. This downward spiral is going to piss off a lot of rice producing countries and rice traders. Also millers will be expected to lower their processing prices as the commodity is worth less by the day.

The government are so desperate, they have no choice but to get the rice out fast. A problem of their own making.

Even a three auctions per month of 250,000 tonnes at a time, that is only 750,000 tonnes/month over the next 12 months. I wonder how cheap the rice will be on the 36th auction of the year?

At 750K ton a moth, that equates to only 9 million tonnes over the next 12 months. Leaving some 9 million tonnes PLUS the expected 11 million tonnes expected to hit the warehouses over the next 12 months... That makes the problem rise to 20 million tonnes with global prices now bottomed out globally.

The rice farmers are screwed for potentially years to come.

Thaksin's PTP has made a rod for the backs of the rice farmers, all future governments, rice traders and global rice producers.

Yingluck still thinks that the rice scheme has been good for the farmers....... erm....

Edited February 14, 2014 by mightyatom

[noikrit]

" The Election Commission is also considering whether the plan could be carried out during the caretaker government. "

It is very odd when something as fundamental as that is relegated to such an apparently minor mention in a news story. But it's front and centre. Yingluck is presently engaged in a make-believe administration, making all sorts of unrealistic promises - but it has no power. The administrations's unilateral, daily actions to somehow skirt around the constitution in ever more imaginative ways will all flounder at the steps of the courts.

Yes it certainly looks like the Shin Governments plan is to break so many laws as fast as possible thus racking up such a back log within the courts system as to prevent any prosecutions being conducted at all ......

[Thormaturge]

Thaksin's PTP has made a rod for the backs of the rice farmers, all future governments, rice traders and global rice producers.

Yingluck still thinks that the rice scheme has been good for the farmers....... erm....

Sadly the worst outcome for the farmers is that they may wind up having to accept the prices they would have received under the Democrats.

[JesseFrank]

Thaksin's PTP has made a rod for the backs of the rice farmers, all future governments, rice traders and global rice producers.

Yingluck still thinks that the rice scheme has been good for the farmers....... erm....

Sadly the worst outcome for the farmers is that they may wind up having to accept the prices they would have received under the Democrats.

Under the Democrats they would have received the world market price and additional subsidy's in the form of goods needed to grow rice.

If they are lucky now they will receive way below the world market price, and this only after this government has driven them so deep in debt that all the money they receive will go to the loan sharks.

[tebee]

Not only that, the future world market price is going to be lower than it would have been, at least until all the government stock are cleared.

[samran]

This is unfolding like I have predicted and stated several times on this forum.

The price is going down steadily in the global market. This downward spiral is going to piss off a lot of rice producing countries and rice traders. Also millers will be expected to lower their processing prices as the commodity is worth less by the day.

The government are so desperate, they have no choice but to get the rice out fast. A problem of their own making.

Even a three auctions per month of 250,000 tonnes at a time, that is only 750,000 tonnes/month over the next 12 months. I wonder how cheap the rice will be on the 36th auction of the year?

At 750K ton a moth, that equates to only 9 million tonnes over the next 12 months. Leaving some 9 million tonnes PLUS the expected 11 million tonnes expected to hit the warehouses over the next 12 months... That makes the problem rise to 20 million tonnes with global prices now bottomed out globally.

The rice farmers are screwed for potentially years to come.

Thaksin's PTP has made a rod for the backs of the rice farmers, all future governments, rice traders and global rice producers.

Yingluck still thinks that the rice scheme has been good for the farmers....... erm....

The sad thing about all this is that the democrat party seems wholly incapable of exploiting the situation to their advantage.

[bigbamboo]

This is unfolding like I have predicted and stated several times on this forum.

The price is going down steadily in the global market. This downward spiral is going to piss off a lot of rice producing countries and rice traders. Also millers will be expected to lower their processing prices as the commodity is worth less by the day.

The government are so desperate, they have no choice but to get the rice out fast. A problem of their own making.

Even a three auctions per month of 250,000 tonnes at a time, that is only 750,000 tonnes/month over the next 12 months. I wonder how cheap the rice will be on the 36th auction of the year?

At 750K ton a moth, that equates to only 9 million tonnes over the next 12 months. Leaving some 9 million tonnes PLUS the expected 11 million tonnes expected to hit the warehouses over the next 12 months... That makes the problem rise to 20 million tonnes with global prices now bottomed out globally.

The rice farmers are screwed for potentially years to come.

Thaksin's PTP has made a rod for the backs of the rice farmers, all future governments, rice traders and global rice producers.

Yingluck still thinks that the rice scheme has been good for the farmers....... erm....

The sad thing about all this is that the democrat party seems wholly incapable of exploiting the situation to their advantage.

Agreed. They really should consider dissolving themselves and finding something else to do.

Sometimes you wonder if Suthep is actually working for Thaksin......

[Mosha]

This is unfolding like I have predicted and stated several times on this forum.

The price is going down steadily in the global market. This downward spiral is going to piss off a lot of rice producing countries and rice traders. Also millers will be expected to lower their processing prices as the commodity is worth less by the day.

The government are so desperate, they have no choice but to get the rice out fast. A problem of their own making.

Even a three auctions per month of 250,000 tonnes at a time, that is only 750,000 tonnes/month over the next 12 months. I wonder how cheap the rice will be on the 36th auction of the year?

At 750K ton a moth, that equates to only 9 million tonnes over the next 12 months. Leaving some 9 million tonnes PLUS the expected 11 million tonnes expected to hit the warehouses over the next 12 months... That makes the problem rise to 20 million tonnes with global prices now bottomed out globally.

The rice farmers are screwed for potentially years to come.

Thaksin's PTP has made a rod for the backs of the rice farmers, all future governments, rice traders and global rice producers.

Yingluck still thinks that the rice scheme has been good for the farmers....... erm....

The sad thing about all this is that the democrat party seems wholly incapable of exploiting the situation to their advantage.

Agreed. They really should consider dissolving themselves and finding something else to do.

Sometimes you wonder if Suthep is actually working for Thaksin......

Would you guys want to inherit this mess without an interim government? Of the government gets sued, it will be the government of the day that is judged. As has happened over 2010

[Robby nz]

Somchart Soithong, director-general of the ministry's Internal Trade Department, said the auction was expected to generate Bt1 billion

If that auction raises 1 billion that means they will only need another 129 of them with the same result to pay off the farmers.

At 2 a month they should have the farmers paid off in a bit over 5 years.

Be patient farmers, we are working to pay you.

[PaullyW]

In other words, we tax payers can expect billions in losses to occur from the overstocked rice. So nice to see our hard earned tax dollars at work. Thanks PTP!

Particularly nice for us farangs who pay far more tax than 95% of the Thai populace but who get absolutely <deleted> for it. No rights. Little respect and acknowledgement. Almost nothing.

Is anyone forcing you here?

Can I live in your country as easily as here,Will 800,000k retirement visa be freely available with 30 baht medicine.What acknowledgement do you expect from Thailand ?

I think you know the answer,isn't it so much better here,if you don't like it why not leave unlike most of the poor whom you disparage with coarse <deleted> language .It is somewhat colonial to expect them to ctually like you as well as pay you.Falangs are servants the sooner that sinks in the better,immigration has and will change its regulations a whim.

Huh? Come again please.

[mikemac]

In other words, we tax payers can expect billions in losses to occur from the overstocked rice. So nice to see our hard earned tax dollars at work. Thanks PTP!

Particularly nice for us farangs who pay far more tax than 95% of the Thai populace but who get absolutely <deleted> for it. No rights. Little respect and acknowledgement. Almost nothing.

The nasty way you talk about Thailand and it's people (which contravenes Forum Rule #8 every time you post) you don't deserve any rights, respect or acknowledgement. If I was Thai I know what I would give you, a lift to the airport.

[Dogmatix]

227,000 tonnes sold and another 18 million tonnes to go, of which 4.5 million are missing and probably another 3-4 million are spoiled.

It would help the market pricing to announce clearly how much is missing or spoiled or they will suffer from oversupply that is not there but it is a huge amount, even if the unsaleable and non-existent stocks are deducted.

Edited February 15, 2014 by Dogmatix