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

[selftaopath]

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.

I guess T.S. and his gang of thieves have had .... maybe still do have... their revenge. If he can't have it (Thailand) destroy/injure it might be his distorted view.

[sae57]

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."

That's the problem with the very concept of the pledging program, and why it was doomed to failure even without corruption: hold the rice off the market to force prices up, then put it on the market."

[DavidHouston]

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

"Sushi rice, sticky rice, rice wine vinegar, saki and ethanol. Ethanol? Yes, ethanol - the Japanese are experimenting with rice as fuel. A recent article in the Wall Street Journal explored the subject. But as is always the case, there's more to the story than the quick hit.

With all of the recent news about food shortages and rising food prices worldwide, the idea of growing rice for ethanol would seem ludicrous on the surface. Rice is even more of a main staple than corn for most of the world's population - much more - and just look at the political blame being laid on the threshold of corn ethanol. But in Japan, it's possible, just possible that it makes sense."

http://seekingalpha.com/article/83214-will-rice-fuel-the-next-ethanol-trend

[belg]

will they also sell the rotten rice ? or is that for internal market only to save face ?

[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.

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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.

Who pays for the losses?

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[allan michaud]

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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.

Really, Thailand was only selling between 6-8m tonnes per year previously so how are they supposed to off load it any quicker unless they drop the price so low they lose even more? PTP totally screwed the pooch with this scam and it will take years to get over it. The other rice producing countries are all producing more rice each year so other stock piles are rising too.

[Oziex1]

Why has it been in storage for so long?

[slapout]

In the real world, the rice in storage would be bonded via the storage facility to the Thai government for its value. If this step was left out, insurance claim for whatever loss, (fire/water/insect/etc damage) may be another avenue of recovering taxpayer monies.

The way this whole scam has been handled from the getgo. I would bet that full coverage for losses. are never recovered. from those with the lions share of what

has been/will be involved.

[Thai at Heart]

In the real world, the rice in storage would be bonded via the storage facility to the Thai government for its value. If this step was left out, insurance claim for whatever loss, (fire/water/insect/etc damage) may be another avenue of recovering taxpayer monies.

The way this whole scam has been handled from the getgo. I would bet that full coverage for losses. are never recovered. from those with the lions share of what

has been/will be involved.

This would need very very expensive warehousing and climate controlled facilities. That works for wine but not commodities like rice.

There is no way to insure against storage deterioration due to normal storage. . Rain damage could be insured.

[tingtongteesood]

Depends on the price and the morality of the buyers, if it is cheap enough and the buyers see huge profits to be made from using cheap old crap that could make people ill, it will sell....

[OZEMADE]

Depends on the price and the morality of the buyers, if it is cheap enough and the buyers see huge profits to be made from using cheap old crap that could make people ill, it will sell....

Woolworths in OZ are selling 10KG bags of Long Grain rice grown in Thailand. It is packed by the Sunrice company in leeton NSW. The cost of the 10KG bag was $21.00 a bag reduced to $10.00 a bag. I bought one and the wife said it was rubbish and hard after cooking, the cockatoos now enjoy it every afternoon in the park and she went back to OZ grown rice, not much dearer, but tastes a lot better.

[khaowong1]

Not knowing anything about the storage of rice, I've tried google to learn about how long rice can be stored. There doesn't seem to be a direct answer. Every thing depends on how it's stored. Whether it can be kept from moisture bugs, rodents, etc and etc. 20 to 25 years seems to be the norm.

[Old Man River]

Not knowing anything about the storage of rice, I've tried google to learn about how long rice can be stored. There doesn't seem to be a direct answer. Every thing depends on how it's stored. Whether it can be kept from moisture bugs, rodents, etc and etc. 20 to 25 years seems to be the norm.

You have seen the pictures of the warehoused rice. Does it look to you as if it has been stored in cool, oxygen free containers? It doesn't look that way to me either.

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[northernjohn]

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.

In my opinion the loss will not end on the sale of the 18 million tons.

The quality is such that Thailand's reputation for rice will take an even worse hit than it has now. Not sure of how many won't buy rice any more but I know the Ivory coast, Iraq and Iran have said they will not. That was a year ago. The quality can't have improved.

[fish fingers]

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

exactly

or they could brew a Thaksin memorial rice scam beer.. poor taste, slightly bitter, makes you think you are all powerful and say things you might regret

Edited July 12, 2014 by fish fingers

[khaowong1]

Not knowing anything about the storage of rice, I've tried google to learn about how long rice can be stored. There doesn't seem to be a direct answer. Every thing depends on how it's stored. Whether it can be kept from moisture bugs, rodents, etc and etc. 20 to 25 years seems to be the norm.

You have seen the pictures of the warehoused rice. Does it look to you as if it has been stored in cool, oxygen free containers? It doesn't look that way to me either.

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Heck, never mind the rats and bugs, the humidity in Thailand is going to cause a lot of damage. Your right OMR, they are screwed..

[selftaopath]

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

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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.

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Force the culprits and beneficiaries of this "con" to buy/pay for said rice. Ship it all to T.S. and bill him, his sister, underlings.

[Cake Monster]

There have already been well documented reports of rice being rejected by other countries as being of " poor Quality " for mold, chemical traces , dis-colored Etc

The only way to sell this amount of 500.000 tons / month is to do a " Bogof " deal with the International buyers.

The price of world rice is also falling rapidly due to the Thai announvement to dispose of this rice.

[selftaopath]

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.

According to eHow:

What Are the Life Spans of Rice,

Rice

• Plain white rice has a shelf life of up to two years when stored properly. Keep rice in an airtight container of glass or plastic and store away from light in a cool location, such as a pantry cupboard. It's best not to rely on the plastic or cardboard packaging the rice comes in at the supermarket as these are subject to infestation, particularly from pantry moths. If a larger glass or plastic container is not available, secure the bag in a self-sealing bag and remove as much of the air out as possible before sealing. Brown, wild rice and herbed rice mixes have a shorter shelf life of about six months.

Read more : http://www.ehow.com/list_7310921_life-flour-staple-food-products_.html

[Skywalker69]

Why has it been in storage for so long?

Thaksin wanted to controll the world market and hoped that the price for rice would rise, he (the big businessman ) shot him self in the foot.

[Old Man River]

Not knowing anything about the storage of rice, I've tried google to learn about how long rice can be stored. There doesn't seem to be a direct answer. Every thing depends on how it's stored. Whether it can be kept from moisture bugs, rodents, etc and etc. 20 to 25 years seems to be the norm.

You have seen the pictures of the warehoused rice. Does it look to you as if it has been stored in cool, oxygen free containers? It doesn't look that way to me either.

Sent from my iPad using Thaivisa Connect Thailand

Heck, never mind the rats and bugs, the humidity in Thailand is going to cause a lot of damage. Your right OMR, they are screwed..

Most taxes are collected via VAT. At some point, maybe not now, but sooner or later VAT will have to be raised to pay for the mess made by the PTP.

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[Thai at Heart]

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.

In my opinion the loss will not end on the sale of the 18 million tons.

The quality is such that Thailand's reputation for rice will take an even worse hit than it has now. Not sure of how many won't buy rice any more but I know the Ivory coast, Iraq and Iran have said they will not. That was a year ago. The quality can't have improved.

They plan to sell 9mn.

Same as a few years ago. Buyers aren't stupid. They will just buy new crop.