Commerce hopes to secure a deal to sell Thai rice to Philippines

[webfact]

Commerce hopes to secure a deal to sell rice to Philippines

BANGKOK, 31 Mar 2014, (NNT) - The Commerce Ministry is keen to secure the sale of 800,000 tons of rice to the Philippines on April 15th, saying the other main contender is Vietnam.

The Director General of the Department of Foreign Trade Surasak Riengkrua noted that the upcoming auction is open to any country, either in the form of governmental units or via the private sector, abolishing the need to sign a Memorandum Of Agreement (MoA) on rice deal with the Phillipines administration. He said his department is forwarding the matter to the ministry to seek approval to join the auction.

According to a source in the Commerce Ministry, the Philippines wants to purchase 800,000 tons of 25% rice, citing the top contenders as Thailand, Vietnam, India, and Pakistan. Thailand's rice is priced at 350 US Dollars a ton, which is somewhat cheaper than Vietnam’s at 355 dollars and India’s at 365 dollars a ton.

The source’s analysis indicates that Vietnam is experiencing a rice oversupply, making the country the biggest rival of Thailand in selling the grain. It is of the opinion that the two competing countries could drive the price way below the standard price in order to secure a deal.


-- NNT 2014-03-31

[khwaibah]

Another crock of BS.

[animatic]

Yes, Keen To Do it!

Doesn't mean in any sense the buyer is at all keen.

Just more yes, see we're working, yes, we're paying the farmers,

say anything before the ship sinks, verbal effluent.

Edited March 31, 2014 by animatic

[antimedia]

When you have made the sale, paid the farmers and have concrete evidence to that fact to show the puiblic, then open your your bloody big mouth. Until then go back to doing what you really know - nothing.

[Peabody]

Wasn't Thailand's rice bought by the government at about $450/ton?

$100 loss per ton x 800,000 tons = $80,000,000 USD loss or near to 2.5 billion THB

Or is this new rice? Or is my math wrong?

[DLock]

...so, just to check my math.

They paid 15,000 baht per ton of rice.

They are selling it for 11,363 per ton (on todays exchange rate of 32.46 XE.com)

They are losing 3,637 per ton.

So, in total, they are losing 800,000 x 3,637 = 2,909,600,000 baht or $89million dollars.

I guess the only good news if they win, is that they will make over 9billion baht...of which some will hopefully make it to the farmers...

[DLock]

Wasn't Thailand's rice bought by the government at about $450/ton?

$100 loss per ton x 800,000 tons = $80,000,000 USD loss or near to 2.5 billion THB

Or is this new rice? Or is my math wrong?

We pressed SEND at the same time...but we have the same outcome.

[Pib]

Commerce hopes to secure a deal to sell rice to Philippines

Hope is a grand thing; reality is another.

[Scamper]

The beautiful world of Pheu Thai. Think of an idea. Make sure it's a pleasant one ! If it is, and you are just bursting to share it, invite a few cameras. And just spill it all out. Isn't that a lovely idea ? The cameraman likes it, too ? Good. Now all that has to be done is to go through the channels of the real world. But in this beautiful idea that I have, Vietnam, the Philippines, and any other country that will lose sleep over this auction because it is that exciting - will jump at the chance to buy old rice, as long as they save 1 % on the full price. Because in this beautiful idea that I have, old rice trumps new every time. And the 1 % savings is just icing on the cake.

[Ricardo]

The-FM Surapong was running with this some nine months ago, it's regurgitated every so often, but doesn't ever seem to lead to any actual sales ?

Never mind, dust it off, and 'Play It Again, Sham' !

http://www.thaivisa.com/forum/topic/648247-thai-fm-surapong-eyes-hom-mali-rice-sale-to-philippines/?p=6530665&hl=%2Bphillipines+%2Brice+%2Bsale

Edited March 31, 2014 by Ricardo

[aguy30]

Amazing that someone actually gave the requested selling price of the rice. The real problem might still be that this is the two or three year old crop versus the new Vietnam crop. That could be deal breaker with only a $5 discount spread for the extra vermin and mold. Maybe it could labeled "enhanced protein and flavor".

The government paid 15,000 baht PLUS the storage fees. The return is at a loss of more than 25% from cost. Nice job Yingluck, only an $80,000,000 + loss IF the sale completes.

[Thai at Heart]

THis is the cheapest and lowest quality of all the rice right?

Would you as the Philippines dare to bother to buy it, knowing the way its been stored? Or if it is new crop, what odds they will try to mix in old crop? The loss will be a hell of a lot more than$ 80mn. They would have to pay to replace a massive percentage and dispose of whatever is rejected at destination. It's getting to point, where they will be better off disposing of the lowest quality stuff that is 2 years old. No one is going to buy except for animal feed.

[AleG]

...so, just to check my math.

They paid 15,000 baht per ton of rice.

They are selling it for 11,363 per ton (on todays exchange rate of 32.46 XE.com)

They are losing 3,637 per ton.

So, in total, they are losing 800,000 x 3,637 = 2,909,600,000 baht or $89million dollars.

I guess the only good news if they win, is that they will make over 9billion baht...of which some will hopefully make it to the farmers...

There's a problem with your figures, you are taking the price paid for paddy rice, 15.000 per ton, and comparing it to the export price after it has been milled, transported, stored and shipped.

Right off the bat from paddy rice to milled rice there's an average, AFAIK, of 40% weight reduction, from removing the husk and drying of the grain. Therefore the 15.000 ton of rice turns into 15.000 Baht 600kg pile, or one ton at 21.000 Baht, without even factoring in the actual cost of the milling itself. Then as mentioned are the transport, storage and shipping costs, not to forget the administrative and whatever dipping of the hand in the jar that may be going on.

Some time ago I saw the total cost of the scheme at 29.000 Baht per ton, which seems about (horribly) right, so 29.000 spent, the farmer gets at best 15.000, sold for 11.363, and still a million or so farmers that haven't been even paid, fantaaaaaaaastic.

Edited March 31, 2014 by AleG

[caughtintheact]

Another crock of BS.

Yes, but the BS sells better.

[Lupatria]

I would have tipped my hat if this noble nation would have donated some of its unsaleable rice to the victims of the typhoon on the Philippines. It did not happen.

Oh I forgot, that would not be in line with Thaksin's prediction that Thailand's rice business would profit of natural disasters elsewhere. If I were a Thai Buddhist I would be very ashamed now.

[allan michaud]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Wasn't Thailand's rice bought by the government at about $450/ton?

$100 loss per ton x 800,000 tons = $80,000,000 USD loss or near to 2.5 billion THB

Or is this new rice? Or is my math wrong?

We pressed SEND at the same time...but we have the same outcome.

However. I am unsure if the 15,000 per ton was for paddy (unmilled) or milled rice? And are they selling milled or unmilled rice, I assume it's milled.

[gabruce]

...so, just to check my math.

They paid 15,000 baht per ton of rice.

They are selling it for 11,363 per ton (on todays exchange rate of 32.46 XE.com)

They are losing 3,637 per ton.

So, in total, they are losing 800,000 x 3,637 = 2,909,600,000 baht or $89million dollars.

I guess the only good news if they win, is that they will make over 9billion baht...of which some will hopefully make it to the farmers...

Don't forget moisture loss, so the original ton is no longer 1 ton. Storage and transportation costs. Totally ignore spoilage losses and corruption.

[DLock]

...so, just to check my math.

They paid 15,000 baht per ton of rice.

They are selling it for 11,363 per ton (on todays exchange rate of 32.46 XE.com)

They are losing 3,637 per ton.

So, in total, they are losing 800,000 x 3,637 = 2,909,600,000 baht or $89million dollars.

I guess the only good news if they win, is that they will make over 9billion baht...of which some will hopefully make it to the farmers...

There's a problem with your figures, you are taking the price paid for paddy rice, 15.000 per ton, and comparing it to the export price after it has been milled, transported, stored and shipped.

Right off the bat from paddy rice to milled rice there's an average, AFAIK, of 40% weight reduction, from removing the husk and drying of the grain. Therefore the 15.000 ton of rice turns into 15.000 Baht 600kg pile, or one ton at 21.000 Baht, without even factoring in the actual cost of the milling itself. Then as mentioned are the transport, storage and shipping costs, not to forget the administrative and whatever dipping of the hand in the jar that may be going on.

Some time ago I saw the total cost of the scheme at 29.000 Baht per ton, which seems about (horribly) right, so 29.000 spent, the farmer gets at best 15.000, sold for 11.363, and still a million or so farmers that haven't been even paid, fantaaaaaaaastic.

Good points.

I was calculating just on above the line costs that we can see...I agree that there are a lot of (potentially inflated) numbers we are not privy to.

Regardless, the numbers are just horrible.

[worgeordie]

Will Thais learn from this, I think not,a new Government will come in,

(same one) and will continue with the same money wasting policies,

sad but true,when the money wasted could have been put to a much

better use.

regards Worgeordie

[khunken]

Well if they fail to get the contract they can always blame Suthep - again.

[tiffanystoyz]

The real News is Philippines isn't buying Thai rice at any price there trying to sell there over supply they have more lies from PTP.

[NeilSA1]

...so, just to check my math.

They paid 15,000 baht per ton of rice.

They are selling it for 11,363 per ton (on todays exchange rate of 32.46 XE.com)

They are losing 3,637 per ton.

So, in total, they are losing 800,000 x 3,637 = 2,909,600,000 baht or $89million dollars.

I guess the only good news if they win, is that they will make over 9billion baht...of which some will hopefully make it to the farmers...

There's a problem with your figures, you are taking the price paid for paddy rice, 15.000 per ton, and comparing it to the export price after it has been milled, transported, stored and shipped.

Right off the bat from paddy rice to milled rice there's an average, AFAIK, of 40% weight reduction, from removing the husk and drying of the grain. Therefore the 15.000 ton of rice turns into 15.000 Baht 600kg pile, or one ton at 21.000 Baht, without even factoring in the actual cost of the milling itself. Then as mentioned are the transport, storage and shipping costs, not to forget the administrative and whatever dipping of the hand in the jar that may be going on.

Some time ago I saw the total cost of the scheme at 29.000 Baht per ton, which seems about (horribly) right, so 29.000 spent, the farmer gets at best 15.000, sold for 11.363, and still a million or so farmers that haven't been even paid, fantaaaaaaaastic.

Well, this is very different to what BlueNoseCodger posted today at 04.44

"The flip side of that, is what happens if Suthep gets power? What does he do with the rice pledge stocks? The current buy price is 15000 baht, and export price is 37770 baht. If Suthep continues to export that stock at 37770 (link to export prices) baht a tonne, then the scheme ultimately becomes very very profitable for government. On the other hand he supports the rice middleman cartel, what if he sells it back to them at their usual price of 11,111 (milled) or similar? Then the government takes a huge loss, and these rice middlemen get a huge windfall!..."

[Thai at Heart]

...so, just to check my math.

They paid 15,000 baht per ton of rice.

They are selling it for 11,363 per ton (on todays exchange rate of 32.46 XE.com)

They are losing 3,637 per ton.

So, in total, they are losing 800,000 x 3,637 = 2,909,600,000 baht or $89million dollars.

I guess the only good news if they win, is that they will make over 9billion baht...of which some will hopefully make it to the farmers...

There's a problem with your figures, you are taking the price paid for paddy rice, 15.000 per ton, and comparing it to the export price after it has been milled, transported, stored and shipped.

Right off the bat from paddy rice to milled rice there's an average, AFAIK, of 40% weight reduction, from removing the husk and drying of the grain. Therefore the 15.000 ton of rice turns into 15.000 Baht 600kg pile, or one ton at 21.000 Baht, without even factoring in the actual cost of the milling itself. Then as mentioned are the transport, storage and shipping costs, not to forget the administrative and whatever dipping of the hand in the jar that may be going on.

Some time ago I saw the total cost of the scheme at 29.000 Baht per ton, which seems about (horribly) right, so 29.000 spent, the farmer gets at best 15.000, sold for 11.363, and still a million or so farmers that haven't been even paid, fantaaaaaaaastic.

Well, this is very different to what BlueNoseCodger posted today at 04.44

"The flip side of that, is what happens if Suthep gets power? What does he do with the rice pledge stocks? The current buy price is 15000 baht, and export price is 37770 baht. If Suthep continues to export that stock at 37770 (link to export prices) baht a tonne, then the scheme ultimately becomes very very profitable for government. On the other hand he supports the rice middleman cartel, what if he sells it back to them at their usual price of 11,111 (milled) or similar? Then the government takes a huge loss, and these rice middlemen get a huge windfall!..."

That is top top quality hom mali rice. Apples and orange comparison. That makes up only 15% of what they export.

[Skywalker69]

The commerce going to need all the good luck they can get.

[gandalf12]

Vietnam 1 - Thailand 0

Edited March 31, 2014 by gandalf12

[steamer]

I was under the impression that it was typical for the Thai gov't to subsidise the rice farmers. Ie buy at a higher level than what they sell it at overseas.

[JeffreyWitty]

Isn't selling rice to the Philippines like selling snow to and Eskimo?

I thought the Philippines was a major rice exporter. Why buy? Ridiculous!