Bangchak is ready to buy rotten rice to produce ethanol if…

[webfact]

Bangchak is ready to buy rotten rice to produce ethanol if…

 

BANGKOK: -- The plan to convert rotten rice into ethanol may hit snag as Bangchak Petroleum has set a condition that benzene 95 should be phased out too so that the company can expand its market for ethanol.

 

Mr Wichien Ussanachote, CEO of Bangchak Petroleum, said today that he had told General Dapong Rattanasuban, deputy army chief and a board member of the company that Bangchak was willing to buy the rotten rice from rice warehouses for conversion into ethanol on one condition that the company should be allowed to stop producing and selling benzene 95.

He pointed out that most motorists have now switched to gasohol instead of benzene 95.

Mr Wichien further said that the company would have to find out the quality of the rotten rice to determine the proportion of ethanol to be produced from the rotten rice.

Currently, the company has been using tapioca as the raw material to produce ethanol and tapioca farmers may be affected if the company switches to rotten rice.

Bangchak now has two production units for ethanol. One is at Ubon Bioethanol plant where the company has 21.3 percent stake. Production capacity as 400,000 litres per day.

The other unit is at Seema Inter Products where the company owns 85 percent stake. Production capacity is 150,000 litres/day.

Source: http://englishnews.thaipbs.or.th/bangchak-ready-buy-rotten-rice-produce-ethanol/

[thaipbs]2014-08-06[/thaipbs]

[EuropeanExpat]

I don't know the current market price of Tapioca but I do know it's a lot cheaper p/MT then the inflated price paid by the previous Government for the Rice, which was left to rot.
So even if the Rice is turned into ethanol the financial loss will be substantial - even if 1 MT of rotten rice produces the same quantity of Ethanol then 1 MT of Tapioca.

[EuropeanExpat]

I don't know the current market price of Tapioca but I do know it's a lot cheaper p/MT then the inflated price paid by the previous Government for the Rice, which was left to rot.
So even if the Rice is turned into ethanol the financial loss will be substantial - even if 1 MT of rotten rice produces the same quantity of Ethanol then 1 MT of Tapioca.

[Bob12345]

I don't know the current market price of Tapioca but I do know it's a lot cheaper p/MT then the inflated price paid by the previous Government for the Rice, which was left to rot.
So even if the Rice is turned into ethanol the financial loss will be substantial - even if 1 MT of rotten rice produces the same quantity of Ethanol then 1 MT of Tapioca.

And the alternative is ...?

 

Or you try to point out that the rice subsidy scheme is making is a loss like every subsidy ever invented besides the ones where you can corner the market?

Edited August 6, 2014 by Bob12345

[EuropeanExpat]

There are feasible alternatives to salvage the rotten rice into something valuable enough to recover at least the high price which was initially paid, but please understand that I can't disclose technical details in a public forum

[IsaanUSA]

Yeah, and you didnt answer my previous question which was asking if your idea/plan is related to food at all for any animal

[the happy camper]

The US learned a lesson in the 1970s, which Thailand can benefit from.

The US instituted two tier pricing of oil, one price for pre 1972 oil, another higher price,

for oil discovered after 1972.

The well intentioned idea was to encourage new oil exploration, by offering a higher price

for newly discovered oil.

 

What happened?

 

Oil tankers left shore loaded with "old" oil, somewhere at sea, the "old" oil miraculously became

"new" oil, making billions of dollars for those that carried out the scheme.

 

Lesson learned:

 

No single sovereign nation, not even one the size of the US, can control the price of an internationally traded commodity. 

[ABCer]

In any free market society Subsidized Production is bound to turn into a loss. Only market can self-regulate the price. Any attempt to circumvent this rule is pregnant with an economic disaster. Farmers must take their own risks. If rice turns out not profitable - they must think what to grow instead. If they can think...

[mike324]

Dhanin Chearavanont owner of CP group and the richest person in Thailand, who is one of the biggest donor to the Pheu Thai group have said himself that he would buy all the rice if Thailand can't sell them back when PT was promoting the Rice Scheme during Yinglucks administration. He has recanted his statement and been pretty quite lately regarding to the rice schemes.

[tomross46]

Is the spoiled rice, the same rice that was in the warehouses during the 2011 floods? If so why was it not written off the books in 2011, as a bad asset? OH! how dumb can I be, It was an asset and there were already outstanding bank loans against the unusable asset, so it could not be written off.