18 million tons of Thai rice to be sold out in three years

[webfact]

18 million tons of rice to be sold out in three years



BANGKOK: -- The Foreign Trade Department (FTD) plans to sell out all the 18 million tons of rice in government stocks within three years.

According to Duangporn Rodphaya, the FTD newly appointed director-general, the government rice stocks will be sold mainly through four channels; general auction, government-to-government, direct sales and the Agricultural Futures Exchange of Thailand.

She said the rice sales will begin next month with 500,000 tons to be sold monthly.

With the rice checks commissioned by the National Council for Peace and Order, authorities could now roughly appraise the quality and the amount of rice in government stocks, she said.

The FTD is also committed to revising selling conditions to make them flexible and based on the quality of rice grain and avoiding selling government stocks on a whole-warehouse basis.

The rice checks have so far found degraded or deteriorated rice made up 20% of the overall stockpile, she said.

The checks are conducted by 100 teams, each of which consists of between six and 10 people chosen from military and police units as well as agencies such as the Public Warehouse Organisation and the Bank for Agriculture and Agricultural Cooperatives.

Source: http://englishnews.thaipbs.or.th/18-million-tons-rice-sold-three-years/


-- Thai PBS 2014-07-11

[ratcatcher]

Rice, unlike fine wine or some liquor, doesn't age well. Thus buyers will want the most recent stocks. Good luck with selling rice that is actually six or seven years old.

They will probably offer incentives like "Buy 100,000 tons and get 50,000 tons free."

Interesting comments to follow.

[Basil B]

When they complete the stock take, will they actually have 18 million tons to sell?

[Chang_paarp]

Pet food industry will be very happy.

[Robby nz]

Surely these sales are going to be in direct competition with the farmers new season rice and will only serve to lower the price even farther.

But there is no choice other than to get rid of it as quickly as possibly and minimize the losses for the longer it is kept the more it will deteriorate.

The rice checks have so far found degraded or deteriorated rice made up 20% of the overall stockpile, she said.

So what is the value of this rice, is it salable and if it is for what ?

Assuming they come up with a total of 15 million tons and the 20% of bad rice is overall then that means 3 million tons of bad rice.

This has to be added to what is physically missing from the three years of the scheme

If it is going to take 3 years to clear the stockpile how many more tons will go bad in that time ?

And of course there is still the ongoing storage costs.

The eventual loss from this could well be over the trillion.

[Robby nz]

Pet food industry will be very happy.

Don't know about that, there was a report some time back of rice that had been given to the elderly in Phitsanalok and they were complaining that it was so rotten that even the dogs wouldn't eat it.

[Hawk]

Pet food industry will be very happy.

Don't know about that, there was a report some time back of rice that had been given to the elderly in Phitsanalok and they were complaining that it was so rotten that even the dogs wouldn't eat it.

18 million tons will be THROWN out in less than three years. It must smell darn awful by now, and probably full of those tiny black bugs as well. Land of unrealistic dreams.

[Kf6vci]

Really? Is this the very best they can do?!? No sense of urgency?

It's both, sad and infuriating how further unnecessary losses will be reaped for the Thai taxpayers.

Why can't they use pro traders who have a financial interest in selling the rice?!?

The stock won't become better over time. then there will be the storage cost. And future scandals as moths and mice and humidity etc. all degrade the rice further.

[kriswillems]

Can't the rice be changed into alcohol for producing gassohol?

[Mango Bob]

And what happens to the rice the farmers are growing now? Will that be on sale in another 3 years, or maybe a 2 to for 1 sale.

[shirtless]

I think this time line needs to be revised, How many times can rice be sprayed to rid pests, whats its shelf life .

[ratcatcher]

And what happens to the rice the farmers are growing now? Will that be on sale in another 3 years, or maybe a 2 to for 1 sale.

Normally foreign buyers request the newest crop available.

With the rice pledging program cancelled, farmers will be anxious to get the best possible prices on the 'free' market for the new crops coming off the fields.

Trying to sell vintage rice that's been stored 4 or 5 years will be an uphill battle.

[BSJ]

And what happens to the rice the farmers are growing now? Will that be on sale in another 3 years, or maybe a 2 to for 1 sale.

Well I can only comment on the areas I have seen in PhiChit and Phitsanulok, my thoughts are the farmers will be lucky if they get half of last seasons crop. There just isn't enough water anywhere for the paddie fields.

I pity those that have cattle. Each cow needs 40-50 litres of water a day and if they don't have a well they will be in trouble too!

[Basil B]

And what happens to the rice the farmers are growing now? Will that be on sale in another 3 years, or maybe a 2 to for 1 sale.

Normally foreign buyers request the newest crop available.

With the rice pledging program cancelled, farmers will be anxious to get the best possible prices on the 'free' market for the new crops coming off the fields.

Trying to sell vintage rice that's been stored 4 or 5 years will be an uphill battle.

Probably sell it to pet food, ready meals, and instant pot noodle/rice manufactures.

No doubt buyers will want a non discloser deal, "don't tell anyone you sell to us"

[LuckyLew]

Who would buy old rotten thai rice that has been stored in old warehouses for years? With no idea what you are getting you woyld have to buy it at one heck of a low price

Sent from my GT-N5100 using Thaivisa Connect Thailand mobile app

[Old Man River]

Who would buy old rotten thai rice that has been stored in old warehouses for years? With no idea what you are getting you woyld have to buy it at one heck of a low price

Sent from my GT-N5100 using Thaivisa Connect Thailand mobile app

It is an inherited problem. There is really not a whole lot they can do. Ultimately, I think a lot of it will go to waste.

Sent from my iPad using Thaivisa Connect Thailand

[NeverSure]

Weren't the numbers of around 19 million tons total purchased for the rice scheme tossed around much earlier?

How do they find so much rotten and missing rice without even checking all of the warehouses yet, and come up with 18 million tons will be sold?

[Old Man River]

Weren't the numbers of around 19 million tons total purchased for the rice scheme tossed around much earlier?

How do they find so much rotten and missing rice without even checking all of the warehouses yet, and come up with 18 million tons will be sold?

Most probably an estimation. What will be interesting is the mark to market estimate on the value vis a vis what it cost the country.

Sent from my iPad using Thaivisa Connect Thailand

[bangrak]

This press release sounds way too much like the crooked surrealisticpropaganda we got used to daily get from PTP and its pseudo-governement's PR services. Has this message been lost in the mail for three months, or is the swan song from some fat officials before getting sacked? Has this FTD not, yet, been 'reformed' by the NCPO, maybe?

[dcutman]

Weren't the numbers of around 19 million tons total purchased for the rice scheme tossed around much earlier?

How do they find so much rotten and missing rice without even checking all of the warehouses yet, and come up with 18 million tons will be sold?

8 months or so ago the PTP (commerce minister and Yingluck) was (what seemed to be) bragging there was only 7 to 9 million tons rice left in stocks. ll this does beg serious questions. The main being, How much was purchased, how much was sold and how much rice is supposed to really be in stocks?

[Thai at Heart]

They need every alternative product to supply they can think of to get rid of this stuff. 3 year old rice has no other use than pig food. Alcohol, compost, fish food, brick? what the hell can be done with 3 year old rice. because in 3 years more, it is not going to be worth one penny.

[opalred]

to keep rice or any grain that long would have to be loaded with that much pestiside and other fungal sprays would also kill every living thing in contact

enjoy your fried rice cheers

[Robby nz]

Weren't the numbers of around 19 million tons total purchased for the rice scheme tossed around much earlier?

How do they find so much rotten and missing rice without even checking all of the warehouses yet, and come up with 18 million tons will be sold?

Not the total purchase but the commerce ministries number in storage as quoted by Yingluck :

Posted 2014-04-24 09:59:53

PM urges NACC to inspect rice stock to determine whether rice was really missing

BANGKOK, 24 April 2014 (NNT) – Prime Minister Yingluck Shinawatra has asserted that rice in the government's stockpile has not gone missing as suspected by the National Anti-Corruption Commission (NACC), urging the latter to conduct an inspection of the government's rice stock to determine whether rice was really missing.

Ms. Yingluck wrote on her Facebook that figures in the documents from the rice mortgage accounting sub-committee did not take into account the 2.9 million tons of rice in the possession of the Government Warehouse Organization and the Marketing Organization for Farmers, refuting the claim that some rice had gone missing.

She suggested that for the purpose of transparency, the NACC should seek more evidence and inspect the rice stock itself. The suggestion has been forwarded to the NACC through Deputy Commerce Minister Yanyong Phuang-rat.

Minister Yanyong visited the NACC on Wednesday to submit a letter asserting that inspections of the rice stock in warehouses, carried out in March by Ministry of Commerce officials and members of the rice stock inspection committee, found that the entire 18.7 million tons of rice was intact and another 1.1 million tons was being fumigated.

So there you are an inspection in March found that there was 19.9 tons in storage all in good order.

She will be happy to see that her suggestion has now been taken up, although it could probably be reasonably said that the results so far are not to her liking.

However :

Posted 2014-02-11 16:18:29

Mystery fire at Lopburi rice warehouse

BANGKOK: -- A fire broke out at a rice warehouse in Chai Badan district of Lop Buri province Tuesday morning causing damages to some of the thousands of rice sacks stored inside.

All the rice stockpiles are pledged by farmers under the government’s rice-pledging scheme for 2012 crop year.

Arson was believed to be a strong motive of the fire at the warehouse.

It came one day after rice farmers threatened to shut down and search all government warehouses to check stocks and inspect the rice quality if they are the same as declared. Farmers believed a large quantity of rice might be missing and also might be rotten and spoilt.

The fire at this rice warehouse also came just a few days after a former Democrat party MP and a rice expert Dr Warong Dejkijwikrom warned of possible arsons at rice warehouses to destroy evidence of rampant corruption in the rice pledging scheme.

The fire at the warehouse in Chai Badan happened at about 8.00 a.m.

He said the warehouse was used to store rice of the 2012 crop year pledged under the scheme. The former MP predicted there would be more fires at the warehouses where pledged rice is stockpiled, to destroy evidence of corruption after farmers had vowed to inspect and examine the quality of rice.

He also said that when water was sprayed into the gutted warehouse, all rice kept would be destroyed and could be hardly proved whether they were spoilt or rotten before the fire or not. This is a fact which all rice traders know very well that it is a mean to destroy evidence.

Source: http://englishnews.t...rice-warehouse/

That as you can see was the month before the commerce ministry inspection so perhaps they missed that warehouse, or....................

There was also rice in storage left over from the TRT govt and the other 2 Thaksin proxy Govts schemes from as far back as before 2008.

[JesseFrank]

8 months or so ago the PTP (commerce minister and Yingluck) was (what seemed to be) bragging there was only 7 to 9 million tons rice left in stocks.

Forgive the man, he only knew 10 million tonnes gonna be nicked before an independent organization would be able to check the stocks, could he have known that it would happen that fast.

[NeverSure]

Weren't the numbers of around 19 million tons total purchased for the rice scheme tossed around much earlier?

How do they find so much rotten and missing rice without even checking all of the warehouses yet, and come up with 18 million tons will be sold?

Most probably an estimation. What will be interesting is the mark to market estimate on the value vis a vis what it cost the country.

Sent from my iPad using Thaivisa Connect Thailand

This also makes me wonder. I was convinced (and still am) that a large reason the YS government didn't sell rice was because it was the collateral for loans. Selling it would have exposed its true value and the bank would have had to realize the loss on the books. Good banking practice would also have caused the bank to mark the rest of the rice to market.

Now the general seems in such a hurry to almost force a mark to market of all of the rice, breaking the bank on paper. The bank would be insolvent. The bank is government owned and holds citizens' deposits which it has loaned for the rice scheme.

Where is the government going to suddenly come up with 700+ billion baht to cover the losses and keep the bank afloat? Now they announce speedy rice sales. Surely this will trigger Moody's and the IMF to dump the Thai ratings???

[surangw]

Pet food industry will be very happy.

Don't know about that, there was a report some time back of rice that had been given to the elderly in Phitsanalok and they were complaining that it was so rotten that even the dogs wouldn't eat it.

yeh, the dogs were licking their butts just to get the taste of the rice out of their mouths

[Thai at Heart]

Weren't the numbers of around 19 million tons total purchased for the rice scheme tossed around much earlier?

How do they find so much rotten and missing rice without even checking all of the warehouses yet, and come up with 18 million tons will be sold?

Most probably an estimation. What will be interesting is the mark to market estimate on the value vis a vis what it cost the country.

Sent from my iPad using Thaivisa Connect Thailand

This also makes me wonder. I was convinced (and still am) that a large reason the YS government didn't sell rice was because it was the collateral for loans. Selling it would have exposed its true value and the bank would have had to realize the loss on the books. Good banking practice would also have caused the bank to mark the rest of the rice to market.

Now the general seems in such a hurry to almost force a mark to market of all of the rice, breaking the bank on paper. The bank would be insolvent. The bank is government owned and holds citizens' deposits which it has loaned for the rice scheme.

Where is the government going to suddenly come up with 700+ billion baht to cover the losses and keep the bank afloat? Now they announce speedy rice sales. Surely this will trigger Moody's and the IMF to dump the Thai ratings???

The numbers aren't anywhere big enough to kill the country economically. It won't trigger some nonsense with Moody's. You think Moody's doesn't have some commodities guy somewhere who they can ask, "what is 3 year old rice worth?"

Answer "nothing".

http://oryza.com/

By the way, there is no secret magic to the rice market. It is all very well known what the prices are...

Long grain white rice - high quality

Thailand 100% B grade 425-435 ↔ Vietnam 5% broken 420-430 ↑ India 5% broken 430-440 ↔ Pakistan 5% broken 435-445 ↔ Cambodia 5% broken 440-450 ↔ U.S. 4% broken 550-560 ↔ Uruguay 5% broken 625-635 ↔ Argentina 5% broken 620-630 ↔

Long grain white rice - low quality

Thailand 25% broken NQ ↔ Vietnam 25% broken 370-380 ↑ Pakistan 25% broken 380-390 ↔ Cambodia 25% broken 410-420 ↔ India 25% broken 390-400 ↔ U.S. 15% broken 530-540 ↔

Long grain parboiled rice

Thailand parboiled 100% stxd 430-440 ↔ Pakistan parboiled 5% broken stxd 435-445 ↔ India parboiled 5% broken stxd 415-425 ↔ U.S. parboiled 4% broken 630-640 ↔ Brazil parboiled 5% broken NQ ↔ Uruguay parboiled 5% broken NQ ↔

Long grain fragrant rice

Thailand Hommali 92% 985-995 ↔ Vietnam Jasmine 575-585 ↔ India basmati 2% broken NQ ↔ Pakistan basmati 2% broken NQ ↔ Cambodia Phka Malis 845-855 ↔

Brokens

Thailand A1 Super NQ ↔ Vietnam 100% broken 330-340 ↔ Pakistan 100% broken stxd 325-335 ↔ Cambodia A1 Super 350-360 ↔ India 100% Broken stxd 315-325 ↔ Egypt medium grain brokens NQ ↔ U.S. pet food 470-480 ↔ Brazil half grain NQ ↔

Medium grain milled

U.S. Calrose 4% broken 1025-1035 ↔ Egypt medium grain 6% NQ

- See more at: http://oryza.com/#sthash.IN4M50p8.dpuf

[bigbamboo]

I think I'll stick to Cambodian Hom Mali for the next three years thanks.... just to be on the safe side!

[lostsoul49]

Weren't the numbers of around 19 million tons total purchased for the rice scheme tossed around much earlier?

How do they find so much rotten and missing rice without even checking all of the warehouses yet, and come up with 18 million tons will be sold?

Most probably an estimation. What will be interesting is the mark to market estimate on the value vis a vis what it cost the country.

Sent from my iPad using Thaivisa Connect Thailand

This also makes me wonder. I was convinced (and still am) that a large reason the YS government didn't sell rice was because it was the collateral for loans. Selling it would have exposed its true value and the bank would have had to realize the loss on the books. Good banking practice would also have caused the bank to mark the rest of the rice to market.

Now the general seems in such a hurry to almost force a mark to market of all of the rice, breaking the bank on paper. The bank would be insolvent. The bank is government owned and holds citizens' deposits which it has loaned for the rice scheme.

Where is the government going to suddenly come up with 700+ billion baht to cover the losses and keep the bank afloat? Now they announce speedy rice sales. Surely this will trigger Moody's and the IMF to dump the Thai ratings???

The numbers aren't anywhere big enough to kill the country economically. It won't trigger some nonsense with Moody's. You think Moody's doesn't have some commodities guy somewhere who they can ask, "what is 3 year old rice worth?"

Answer "nothing".

http://oryza.com/

By the way, there is no secret magic to the rice market. It is all very well known what the prices are...

Long grain white rice - high quality

Thailand 100% B grade 425-435 ↔ Vietnam 5% broken 420-430 ↑ India 5% broken 430-440 ↔ Pakistan 5% broken 435-445 ↔ Cambodia 5% broken 440-450 ↔ U.S. 4% broken 550-560 ↔ Uruguay 5% broken 625-635 ↔ Argentina 5% broken 620-630 ↔

Long grain white rice - low quality

Thailand 25% broken NQ ↔ Vietnam 25% broken 370-380 ↑ Pakistan 25% broken 380-390 ↔ Cambodia 25% broken 410-420 ↔ India 25% broken 390-400 ↔ U.S. 15% broken 530-540 ↔

Long grain parboiled rice

Thailand parboiled 100% stxd 430-440 ↔ Pakistan parboiled 5% broken stxd 435-445 ↔ India parboiled 5% broken stxd 415-425 ↔ U.S. parboiled 4% broken 630-640 ↔ Brazil parboiled 5% broken NQ ↔ Uruguay parboiled 5% broken NQ ↔

Long grain fragrant rice

Thailand Hommali 92% 985-995 ↔ Vietnam Jasmine 575-585 ↔ India basmati 2% broken NQ ↔ Pakistan basmati 2% broken NQ ↔ Cambodia Phka Malis 845-855 ↔

Brokens

Thailand A1 Super NQ ↔ Vietnam 100% broken 330-340 ↔ Pakistan 100% broken stxd 325-335 ↔ Cambodia A1 Super 350-360 ↔ India 100% Broken stxd 315-325 ↔ Egypt medium grain brokens NQ ↔ U.S. pet food 470-480 ↔ Brazil half grain NQ ↔

Medium grain milled

U.S. Calrose 4% broken 1025-1035 ↔ Egypt medium grain 6% NQ

- See more at: http://oryza.com/#sthash.IN4M50p8.dpuf

You totally miss his point here.

The fallout can be very dramatic from this.

A bank owned by the government has massive interests in this scheme seeing as it accounts for a huge amount of paper assets and can drive it to insolvency.

Moody's etc... are thankfully a lot more forward thinking than you seem to be.

They take into account the impact of not only the scheme losses, the frail condition of the BACC and the rice prices which you have published and don't take into account buyer confidence when buying from Thailand and would likely be looking elsewhere for the next few years judging by the diminishing quality.

But also the coming 3 year's rice harvests and exactly what the expected 20 million tonnes per year on top of the remaining stockpiles are going to do to the overall domestic and global prices or Thailand's position in the buyer confidence stakes?

Or what happens when 10 million people reliant on rice revenue suddenly have nothing but losses and growing debts. Thyen the household economy starts to shrink.

You look too simplistically at this problem, thank god Moody's and other expert economists don't. Remember, Rice is Thailand's number 1 export. You wreck that industry, you can't say everything is alright and will have zero effect.

The rice INDUSTRY is in the crapper, and a miracle is what is needed to avert an all out disaster to Thailand. Thanks to Thaksin and his corrupt family and regime.

BTW.... Why have you issues prices of the best of Thailand's quality???... The OP is mostly about the fact that Thailand's rice is probably now the worst in the world by the time it ships.

Edited July 11, 2014 by lostsoul49

[Thai at Heart]

Weren't the numbers of around 19 million tons total purchased for the rice scheme tossed around much earlier?

How do they find so much rotten and missing rice without even checking all of the warehouses yet, and come up with 18 million tons will be sold?

Most probably an estimation. What will be interesting is the mark to market estimate on the value vis a vis what it cost the country.

Sent from my iPad using Thaivisa Connect Thailand

This also makes me wonder. I was convinced (and still am) that a large reason the YS government didn't sell rice was because it was the collateral for loans. Selling it would have exposed its true value and the bank would have had to realize the loss on the books. Good banking practice would also have caused the bank to mark the rest of the rice to market.

Now the general seems in such a hurry to almost force a mark to market of all of the rice, breaking the bank on paper. The bank would be insolvent. The bank is government owned and holds citizens' deposits which it has loaned for the rice scheme.

Where is the government going to suddenly come up with 700+ billion baht to cover the losses and keep the bank afloat? Now they announce speedy rice sales. Surely this will trigger Moody's and the IMF to dump the Thai ratings???

The numbers aren't anywhere big enough to kill the country economically. It won't trigger some nonsense with Moody's. You think Moody's doesn't have some commodities guy somewhere who they can ask, "what is 3 year old rice worth?"

Answer "nothing".

http://oryza.com/

By the way, there is no secret magic to the rice market. It is all very well known what the prices are...

Long grain white rice - high quality Thailand 100% B grade 425-435 ↔ Vietnam 5% broken 420-430 ↑ India 5% broken 430-440 ↔ Pakistan 5% broken 435-445 ↔ Cambodia 5% broken 440-450 ↔ U.S. 4% broken 550-560 ↔ Uruguay 5% broken 625-635 ↔ Argentina 5% broken 620-630 ↔

Long grain white rice - low quality Thailand 25% broken NQ ↔ Vietnam 25% broken 370-380 ↑ Pakistan 25% broken 380-390 ↔ Cambodia 25% broken 410-420 ↔ India 25% broken 390-400 ↔ U.S. 15% broken 530-540 ↔

Long grain parboiled rice Thailand parboiled 100% stxd 430-440 ↔ Pakistan parboiled 5% broken stxd 435-445 ↔ India parboiled 5% broken stxd 415-425 ↔ U.S. parboiled 4% broken 630-640 ↔ Brazil parboiled 5% broken NQ ↔ Uruguay parboiled 5% broken NQ ↔

Long grain fragrant rice Thailand Hommali 92% 985-995 ↔ Vietnam Jasmine 575-585 ↔ India basmati 2% broken NQ ↔ Pakistan basmati 2% broken NQ ↔ Cambodia Phka Malis 845-855 ↔

Brokens Thailand A1 Super NQ ↔ Vietnam 100% broken 330-340 ↔ Pakistan 100% broken stxd 325-335 ↔ Cambodia A1 Super 350-360 ↔ India 100% Broken stxd 315-325 ↔ Egypt medium grain brokens NQ ↔ U.S. pet food 470-480 ↔ Brazil half grain NQ ↔

Medium grain milled U.S. Calrose 4% broken 1025-1035 ↔ Egypt medium grain 6% NQ

- See more at: http://oryza.com/#sthash.IN4M50p8.dpuf

You totally miss his point here.

The fallout can be very dramatic from this.

A bank owned by the government has massive interests in this scheme seeing as it accounts for a huge amount of paper assets and can drive it to insolvency.

Moody's etc... are thankfully a lot more forward thinking than you seem to be.

They take into account the impact of not only the scheme losses, the frail condition of the BACC and the rice prices which you have published and don't take into account buyer confidence when buying from Thailand and would likely be looking elsewhere for the next few years judging by the diminishing quality.

But also the coming 3 year's rice harvests and exactly what the expected 20 million tonnes per year on top of the remaining stockpiles are going to do to the overall domestic and global prices or Thailand's position in the buyer confidence stakes?

Or what happens when 10 million people reliant on rice revenue suddenly have nothing but losses and growing debts. Thyen the household economy starts to shrink.

You look too simplistically at this problem, thank god Moody's and other expert economists don't. Remember, Rice is Thailand's number 1 export. You wreck that industry, you can't say everything is alright and will have zero effect.

The rice INDUSTRY is in the crapper, and a miracle is what is needed to avert an all out disaster to Thailand. Thanks to Thaksin and his corrupt family and regime.

BTW.... Why have you issues prices of the best of Thailand's quality???... The OP is mostly about the fact that Thailand's rice is probably now the worst in the world by the time it ships.

The program is stopped. Public debt is under control.

There is no public finance catastrophe guys. The baht is stable. GDP is even still growing. Its all OK.not great. But OK.