Rice bids below Thai ministry's 'floor prices'

[webfact]

FIRST BID
Rice bids below ministry's 'floor prices'
Petchanet Pratruangkrai
The Nation

BANGKOK: -- Scores of traders queued at the Commerce Ministry yesterday to join the first rice auction of the year, but bid below the ministry's "floor prices" despite high demand during the off season and amid transparency in the bidding process.

The working committee will need to ask the bidders who offered the highest prices to raise their prices and will propose the results of the auction to the Rice Policy Committee to decide whether to sell this lot of rice or cancel the sale," said Duangporn Rodphaya, director-general of the Foreign Trade Department.

Of the 49 traders applying, 46 passed the ministry's qualifications for participating in the auction. Exporters, packers, millers and others bid for 167,000 tonnes of various kinds of rice from the past three harvest seasons.

The working committee did not expect the bids to be lower than floor prices, so it may need to ask for a mandate from the chairman of the Rice Policy Committee to adjust some floor prices in order to release rice from the government's stocks.

If the prices are not satisfactory, the government will not be in a hurry to sell rice from its inventory, as pressure to do so has lessened because of a low supply in the market.

The ministry says it is still confident it can reduce rice stockpiles and will continue holding auctions. It will give the result of this auction to the vice chairman of the Rice Policy Committee today. Charoen Laothammatas, president of the Thai Rice Exporters Association, said many traders joined the government's auction because demand was high in the market. He said the bids were quite high and the government should agree to sell rice to increase supply.

The market price for rice is rising gradually because of low supply in the world market.

Chookiat Ophaswongse, honorary president of the association, said it was a good time to release rice from the stockpiles, but the government might have to accept low prices as some stocks had deteriorated in quality.

For this round, many traders were willing to join because it was transparent and open to small outfits. It is hard for traders to conspire on bid rigging because of the high demand in the market, Chookiat said.

A rice-miller source said the bids were quite high. Small traders may be unable to compete with large players, but they had to join the auction because of the shortage of rice in the market.

Source: http://www.nationmultimedia.com/business/Rice-bids-below-ministrys-floor-prices-30240502.html

[thenation]2014-08-08[/thenation]

[terryp]

ooops ...guess these traders know when the army are in a tight spot

 

 

"will need to ask the bidders who offered the highest prices to raise their prices"

 

good luck with that

[dru2]

ooops ...guess these traders know when the army are in a tight spot

 

 

"will need to ask the bidders who offered the highest prices to raise their prices"

 

good luck with that

 

More spin. The 'army' aren't in a tight spot, Thailand as a rice exporting nation is. And the fault for that lies squarely with the previous administration.
 

[snottgoblin]

Let's be honest  those countries who are the target market for this massive stockpile of rice are probably concerned as to the quality of the product, hardly surprising in fact.

 

So those who trade in the rice market will be well aware of the  market forces and the price achievable.

 

Now please don't blame the current administration for the low offer prices,  the blame lies squarely upon the shoulders of the last administrations shadow leader. 

[Prbkk]

Let's be honest  those countries who are the target market for this massive stockpile of rice are probably concerned as to the quality of the product, hardly surprising in fact.
 
So those who trade in the rice market will be well aware of the  market forces and the price achievable.
 
Now please don't blame the current administration for the low offer prices,  the blame lies squarely upon the shoulders of the last administrations shadow leader.

The incessant apportioning of blame is quite tiresome. The problem stems from a global glut of rice and the legitimate attempts of the previous administration to support farmers...a flawed policy in the context of weakening demand, agreed. Get over the obsession with the past, it's boring.

[Bluespunk]

"If the prices are not satisfactory, the government will not be in a hurry to sell rice from its inventory, as pressure to do so has lessened because of a low supply in the market."

And yet they could not get the prices asked. Suspicion still exists about the quality of the product it seems.

[ramrod711]

Chookiat Ophaswongse, honorary president of the association, said it was a good time to release rice from the stockpiles, but the government might have to accept low prices as some stocks had deteriorated in quality.

 

Boring as it may be, the fault lies with the previous government. Having said that, the rice needs to be sold, there is an opportunity to sell. Clear it out to make room for new crops, nothing good will come from holding on to it.

[culicine]

They should cut their losses and sell it for alcohol production. Much of it is not fit for human consumption 

[Valentine]

Better to get some return than none at all whilst continuing to pay storage fees.

[SABloke]

Let's be honest  those countries who are the target market for this massive stockpile of rice are probably concerned as to the quality of the product, hardly surprising in fact.
 
So those who trade in the rice market will be well aware of the  market forces and the price achievable.
 
Now please don't blame the current administration for the low offer prices,  the blame lies squarely upon the shoulders of the last administrations shadow leader.

The incessant apportioning of blame is quite tiresome. The problem stems from a global glut of rice and the legitimate attempts of the previous administration to support farmers...a flawed policy in the context of weakening demand, agreed. Get over the obsession with the past, it's boring.

Get over your obsession with the previous administration, it's boring

[chainarong]

If the bidding is below floor price you can bet ya mothers knitted jumper that the rice price is down and no one wants rice, it is as easy as that , to ask bidders to up the price is pissing into the wind, these people buy for clients worldwide, they are not mugs as some might think they are, the PTP took these people for granted and any old price will do, cause someone said that we Thailand can charge what we like, people have long memories in this trade, there are plenty of other places to trade from , you burn your bridges, eat humble pie Thailand.

[Zonka]

Trying to offload this weavil infested, sub standard overpriced rice is gonna be like pushing sh it uphill IMHO

 

Just had 3 weeks of daily reports how the army have found 'rice missing', 'tainted rice' 'weavil infested' stock.  Then they try to sell it and wonder why the bidding price is low!

 

 

[cloudhopper]

Hellooooo Thailand and welcome to the global free market. Yes the one you naively attempted to corner.

[JesseFrank]

No happiness then at the auction I understand.

[Ricardo]

The working committee will need to ask the bidders who offered the highest prices to raise their prices and will propose the results of the auction to the Rice Policy Committee to decide whether to sell this lot of rice or cancel the sale," said Duangporn Rodphaya, director-general of the Foreign Trade Department.

 

What's the point of running an auction, if you're not going to accept the results, I wonder ?

 

The plan was to clear 3-4 million tons from the rice-mountain, by the end of the year, they've now tested-the-waters with a small quantity & found that it's still not going to get a high-price.

 

So sell it cheaper, at what the market is willing to pay, and blame the previous administration & the chair-person of the Rice Policy Committee in particular, why not ?

 

They should be worrying more about clearing the remaining 17.9 million tons, not saving-face for PTP and their crackpot policy !

[LawrenceChee]

The reality is this rice will rot soon as no one wants to pull the plug and take tough action

The Chinese wisely are staying by the side waiting for a fire sale

This is dumbness in business tactics for the viewing ...but this is Thailand and everyone has to be jai yen yen and smile

I hope someone would decree hahahaha that every household needs to eat 10kg of rice a day hahahah that would help !

Dogs probably don't mind a a rice meal as well


Sent from my iPod touch using Thaivisa Connect Thailand

[apetley]

Let's be honest  those countries who are the target market for this massive stockpile of rice are probably concerned as to the quality of the product, hardly surprising in fact.
 
So those who trade in the rice market will be well aware of the  market forces and the price achievable.
 
Now please don't blame the current administration for the low offer prices,  the blame lies squarely upon the shoulders of the last administrations shadow leader.

The incessant apportioning of blame is quite tiresome. The problem stems from a global glut of rice and the legitimate attempts of the previous administration to support farmers...a flawed policy in the context of weakening demand, agreed. Get over the obsession with the past, it's boring.

Yes there is a global glut which was further exacerbated by the switching of crops to rice here in Thailand in the hope of a quick buck.
Where I live large areas of what was once sugarcane were suddenly dug up three years ago and switched to paddy.
It has created the vast oversupply and subsequent price collapse predicted by many at the time.

[TallGuyJohninBKK]

Trying to offload this weavil infested, sub standard overpriced rice is gonna be like pushing sh it uphill IMHO

 

Just had 3 weeks of daily reports how the army have found 'rice missing', 'tainted rice' 'weavil infested' stock.  Then they try to sell it and wonder why the bidding price is low!

 

 

 

Who would be bidding to buy, what the OP article says is, up to THREE year old rice that's been sitting around in who knows what kind of shoddy conditions??

 

And of equal concern, who's likely to end up unknowingly eating it.

 

Lately, LOTS of sales in the supermarkets on all kinds of different brands of Thai rice --  far more than I've seen in the past.
 

[fab4]

 

 

Let's be honest  those countries who are the target market for this massive stockpile of rice are probably concerned as to the quality of the product, hardly surprising in fact.
 
So those who trade in the rice market will be well aware of the  market forces and the price achievable.
 
Now please don't blame the current administration for the low offer prices,  the blame lies squarely upon the shoulders of the last administrations shadow leader.

The incessant apportioning of blame is quite tiresome. The problem stems from a global glut of rice and the legitimate attempts of the previous administration to support farmers...a flawed policy in the context of weakening demand, agreed. Get over the obsession with the past, it's boring.

Yes there is a global glut which was further exacerbated by the switching of crops to rice here in Thailand in the hope of a quick buck.
Where I live large areas of what was once sugarcane were suddenly dug up three years ago and switched to paddy.
It has created the vast oversupply and subsequent price collapse predicted by many at the time.

 

 

May I humbly suggest the price "collapse" had a great deal more to do with India ending it's rice export ban than some Thai farmers switching their crops from sugarcane to rice. 

[ginjag]

 

 

 

Let's be honest  those countries who are the target market for this massive stockpile of rice are probably concerned as to the quality of the product, hardly surprising in fact.
 
So those who trade in the rice market will be well aware of the  market forces and the price achievable.
 
Now please don't blame the current administration for the low offer prices,  the blame lies squarely upon the shoulders of the last administrations shadow leader.

The incessant apportioning of blame is quite tiresome. The problem stems from a global glut of rice and the legitimate attempts of the previous administration to support farmers...a flawed policy in the context of weakening demand, agreed. Get over the obsession with the past, it's boring.

Yes there is a global glut which was further exacerbated by the switching of crops to rice here in Thailand in the hope of a quick buck.
Where I live large areas of what was once sugarcane were suddenly dug up three years ago and switched to paddy.
It has created the vast oversupply and subsequent price collapse predicted by many at the time.

 

 

May I humbly suggest the price "collapse" had a great deal more to do with India ending it's rice export ban than some Thai farmers switching their crops from sugarcane to rice. 

 

 

Fab let's be honest there are many factors involved, India's policy etc.  The omitting of any fault of the previous admin PTP. is a shining example of your agenda.  Why sidetrack again ??   Cannot understand your stance, it does not have to be the same as mine I'm not saying that, but it is far from fair/normal.    ( the normal is the majority of posters) but that does not mean they are correct, just a view.

[Zonka]

They should cut their losses and sell it for alcohol production. Much of it is not fit for human consumption 

 

and who will drink the alcohol?  humans?

[tingtongteesood]

 

Let's be honest  those countries who are the target market for this massive stockpile of rice are probably concerned as to the quality of the product, hardly surprising in fact.
 
So those who trade in the rice market will be well aware of the  market forces and the price achievable.
 
Now please don't blame the current administration for the low offer prices,  the blame lies squarely upon the shoulders of the last administrations shadow leader.

The incessant apportioning of blame is quite tiresome. The problem stems from a global glut of rice and the legitimate attempts of the previous administration to support farmers...a flawed policy in the context of weakening demand, agreed. Get over the obsession with the past, it's boring.

 

 

The incessant attempts at spin doctoring from you to try and absolve the previous criminal administration of it's wrongdoings are very tiresome. Get over your obsession with trying to defend the Shin empire and its cronies, it's very boring.
 

[joebrown]

I fail to see where the 'transparency' is in this bidding process. The only figure mentioned is 167,000 tonnes of mixed rice being offered for sale. No 'floor' price is disclosed and there is no indication of what the highest bid was. Maybe the potential loss to the Thai coffers is too painful to contemplate and make public? 

[Lupatria]

Hellooooo Thailand and welcome to the global free market. Yes the one you naively attempted to corner.

Is the LOS really aware there are such things as globalization and a free market with rules based on economic principles behind it's borders? However, at the end of the day they have the chance to learn it the hard way when ASEAN applies.

[rametindallas]

Since the auction was declared free and transparent, and the rice is not going to improve with time, if you have found some suckers buyers for your old, dubious quality rice, then salvage what you can from what, otherwise, will be a total loss if you keep waiting for a better offer. Unfortunately, the rice has degraded and the sellers have no bargaining power.

 

I often run into this behavior with Thais when negotiating non-fixed prices. I, nearly always, research and find what they paid for what they are selling, and their costs, and then I make them an offer allowing for a reasonable profit. 95% will leave the deal on the table if they can't overcharge. Fact! I've seen taxis/tuk tuks sit all day waiting for the one customer they can overcharge when they could have made a dozen fares at a reasonable profit. I haven't decided on their reasoning but just say to myself, 'TiT' (This is Thailand). Go figure.

[Ozziepat]

No mention of HOW floor prices were established. This was not an auction for some unique piece of artwork where the seller can arbitrarily set a low acceptable bid limit. The bids submitted for this exercise define current Thai market values for [offered] rice  in the context of international conditions. The junta needs to either accept that or openly declare price controls, something it was trying to quietly accomplish by setting a floor in the first place.  

[wilcopops]

 

So....welcome to the real world, where the military doesn't have full unopposed control.

[wilcopops]

No mention of HOW floor prices were established. This was not an auction for some unique piece of artwork where the seller can arbitrarily set a low acceptable bid limit. The bids submitted for this exercise define current Thai market values for [offered] rice  in the context of international conditions. The junta needs to either accept that or openly declare price controls, something it was trying to quietly accomplish by setting a floor in the first place.  

 

 

They're new at this.

[Stradavarius37]

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

 

 

Let's be honest  those countries who are the target market for this massive stockpile of rice are probably concerned as to the quality of the product, hardly surprising in fact.
 
So those who trade in the rice market will be well aware of the  market forces and the price achievable.
 
Now please don't blame the current administration for the low offer prices,  the blame lies squarely upon the shoulders of the last administrations shadow leader.

The incessant apportioning of blame is quite tiresome. The problem stems from a global glut of rice and the legitimate attempts of the previous administration to support farmers...a flawed policy in the context of weakening demand, agreed. Get over the obsession with the past, it's boring.

 

Legitimate attempt - Lmao  Your continued attempts to try to re-label what they did as "trying to help the poor" instead of "trying to buy votes to steal more" is the obsession that is tiresome....

Edited August 8, 2014 by Stradavarius37

[Thai at Heart]

Why does the product have to be offered to a trader? Why can't they ask for direct international bids also?