Rice bids below Thai ministry's 'floor prices'

[snottgoblin]

fab4 post # 19.

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. 

 

Been said here already  a lot of the problem is and was due to the mad  stampede to plant rice as a replacement for other crops on the promises of fortunes to made. 

 

Certainly fortunes were made we only need to look at the increase in many P.T.P. members, minister and rank and file M.P.'s politicians financial worth both here and abroad  to see that.

[GuestHouse]

The real problem is not the Military Government coming to terms with a price lower than than expectations (they are after all clearing up the mess left by the previous PTP Government).

 

 

The real problem is the fact that Thailand's rice farmers are now addicted to subsidy and feel they have an inalienable right to grow as much of a low grade product as they wish for a guaranteed price of almost twice the market rate, in the full knowledge that a man in Dubai will give them as much Government money as he can pipe their way in return for their unswerving support to his cause of getting off his criminal conviction. 

 

The required reform is to get the Thai Government out of the rice market and allow international buyers to purchase rice at the farm gate. 

 

[somo]

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.

The saying "Don't cut off your nose to spite your face" comes to mind as good advice to give many Thais. Kinda strange in a land where "face" is so important.

[trogers]

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

Neither did the previous administration, or else there would not be stores of several years old rotting rice, nor false sales contracts made up. Edited August 8, 2014 by trogers

[Baerboxer]

 

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.

 

 

Yep - just like the obsession some posters have with Suthep or Sondhi and the yellow shirts and other things in the past.

 

The problem was that Thaksin thought he could manipulate a world commodity price so that he could pay farmers a premium to ensure their support, get a premium price when selling it and allegedly skim a bit in the middle. Everyone a winner. He found out that you can't manipulate and control these complex issues. 

So everyone lost. 

 

It's boring maybe, but not really in the past until the rice scheme corruption investigations and trials have all been completed and the impeachment.

[GarryP]

<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....

How about trying to buy votes and steal more under the guise of helping the poor downtrodden farmer, who is now up shit creek without a paddle as no one will buy his rice over the next few years as there is no longer any demand.  

[oldsailor35]

Cannot sell it , so they want to "Up the price"     lololol    i have noticed this strange type of Thai thinking before.   

[oldsailor35]

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.

I often come across a similiar Thai attitude here on Samui, where a bungalow owner will want Bht12000 month, probably letting it for three months if lucky,  rather than do a guaranteed deal of Bht 8000 per month for a 12 month letting.  This leaves me scratching my head, but this is Thai. 

[oldsailor35]

 

 

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

 

But still think that they can run a country.  

[oldsailor35]

 

 

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.

 

 

Yep - just like the obsession some posters have with Suthep or Sondhi and the yellow shirts and other things in the past.

 

The problem was that Thaksin thought he could manipulate a world commodity price so that he could pay farmers a premium to ensure their support, get a premium price when selling it and allegedly skim a bit in the middle. Everyone a winner. He found out that you can't manipulate and control these complex issues. 

So everyone lost. 

 

It's boring maybe, but not really in the past until the rice scheme corruption investigations and trials have all been completed and the impeachment.

 

But Suthep, the mouth from the south, just did not  know how to keep it shut !

[Emster23]

Yes the rice mountains were created by inept vote buyers from previous misadministration. However, when current admin does not sell for what market will pay, it is their problem. They had their opportunity to deal with reality of market mechanisms, and chose the popular "don't bother me with facts, I've got my own agenda" policy. Meet the new boss, same disconnect as the old boss.

[Old Man River]

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.

Backwards - The PTP were paying twice prevailing market prices and had an approx. 30% market share (FAO), a situation that was then exacerbated by VN's higher productivity, India's ending its rice support ban, farmers switching crops, etc.

Forwards - all auctions have floor prices. If the minimum price is not achieved, items are pulled with floor prices re-evaluated. It happens. This auction was for rice from the last 3 harvests. It should be for the better rice in their stockpiles., hence the attempt to negotiate for higher prices. Hopefully not, but it is possible that, apart from normal farmer subsidies, the cost of this political subsidy may be higher than anticipated.


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[khunken]

 

 

 

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.

 

 

Yep - just like the obsession some posters have with Suthep or Sondhi and the yellow shirts and other things in the past.

 

The problem was that Thaksin thought he could manipulate a world commodity price so that he could pay farmers a premium to ensure their support, get a premium price when selling it and allegedly skim a bit in the middle. Everyone a winner. He found out that you can't manipulate and control these complex issues. 

So everyone lost. 

 

It's boring maybe, but not really in the past until the rice scheme corruption investigations and trials have all been completed and the impeachment.

 

But Suthep, the mouth from the south, just did not  know how to keep it shut !

 

 

A poster mentions an obsession with Suthep and you very kindly prove him right.

 

Well done.

 

 

[Ricardo]

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.  

 

Re-reading the OP, it seems that there is a working-committee at the Commerce Ministry, and also a Foreign Trade Department, who are involved in this.

 

So not necessarily the junta itself setting a floor price, perhaps rather the 'men from the Ministry', who might have a vested interest in reducing the financial-losses & their own loss-of-face ?

 

It would indeed be helpful to know how the floor-price was set, by whom & why ?

 

As the first auction for some time, this was indeed trying to determine what the current value/price is, as you say.

 

And it looks like it is lower than anyone in government would like  ...  Yay for Market-Forces !

[maybefitz]

Indeed, my view is that the rice has to be sold at whatever price, just to clear the stocks. In my part of the world, some rice paddies have not been planted - the rice farmers are wary of spending money on produce that is not going to give an adequate return. What is additionally of interest, is that driving into Chiang Mai, there are many notices up alongside the main road declaring rai after rai of fields up for sale, at basic prices. Despite the much promoted view that the rice farmers are not the sharpest knives in the drawer; the reality is that they can see that the return per rai in the foreseeable future is much diminished. They are therefore selling off large swathes of land - and my wife (who is very attuned to agricultural realities) reckons there are some bargains around; particularly if someone can plant alternative crops. Sweetcorn, potatoes and sugarcane are possibles. Some farmers in recent years have switched to Longans (Lumyai) - but this is now suspect, I see the current price offer is 16bt  for AA grade crops. It's early season yet, so the price might improve - but not to the level of recent years I think. So many farmers are facing big dilemmas, not sure which way to jump. 

 

[mikemac]

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.

 

 

 

Correct, GJ, this rice problem is nothing to do with the PTP, no, it's all about the Indians ending their rice export ban. Yes that is a typical way to defend the previous joke of a government, by appointing blame elsewhere. Does not seem to be working, though. Even a blind halfwit can see where this problem started. 

[mikemac]

Yes the rice mountains were created by inept vote buyers from previous misadministration. However, when current admin does not sell for what market will pay, it is their problem. They had their opportunity to deal with reality of market mechanisms, and chose the popular "don't bother me with facts, I've got my own agenda" policy. Meet the new boss, same disconnect as the old boss.

 

Sorry Em, but the new boss and the old boss could not possibly be any more dissimilar. The new one has the country, not it's own interests as it's main agenda, for one.
 

[The Deerhunter]

Ethanol!!!!!!!!!!!!!!!  Reduce the inventory and get rid of the really bad stuff as well as the nearly really bad stuff..  Only then will prices slowly start to come back up.  Or landfill for same section of inventory.  Ethanol provides a slight moral advantage.   That's all.

Edited August 8, 2014 by The Deerhunter

[The Deerhunter]

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

Um.  Right now it is a buyer's market.  No one is going to pay high prices.  Would you, with your own money?  Some idiots tried to corner the rice market, never heard of Bunker Hunt & silver (look it up). and got creamed.  And took the Thai rice industry down with them   Then, because they were offering silly prices some people might have switched from sugar to rice .  But that should have been an obvious development to the economic geniuses involved and factored in.  Sorry. This doesn't excuse them, it just makes them dumber.  

Edited August 8, 2014 by The Deerhunter

[rubl]

"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

 

"the government might have to accept low prices as some stocks had deteriorated in quality."

 

Choose the conclusion you like:

 

A. it might be that the losses are only mounting. The 18 million tonnes allegedly in stock may not be worth too much if no-one is in a hurry.

B. rising prices will offset the result of loss of quality

C. ask me again after the tong weekend

[farang000999]

The real problem is not the Military Government coming to terms with a price lower than than expectations (they are after all clearing up the mess left by the previous PTP Government).

 

 

The real problem is the fact that Thailand's rice farmers are now addicted to subsidy and feel they have an inalienable right to grow as much of a low grade product as they wish for a guaranteed price of almost twice the market rate, in the full knowledge that a man in Dubai will give them as much Government money as he can pipe their way in return for their unswerving support to his cause of getting off his criminal conviction. 

 

The required reform is to get the Thai Government out of the rice market and allow international buyers to purchase rice at the farm gate. 

 

 

Perhaps dealing with the massive wealth imbalance and lack of a minimum standard of living throughout the kingdom would help the situation as well.

[Thai at Heart]

The real problem is not the Military Government coming to terms with a price lower than than expectations (they are after all clearing up the mess left by the previous PTP Government).
 
 
The real problem is the fact that Thailand's rice farmers are now addicted to subsidy and feel they have an inalienable right to grow as much of a low grade product as they wish for a guaranteed price of almost twice the market rate, in the full knowledge that a man in Dubai will give them as much Government money as he can pipe their way in return for their unswerving support to his cause of getting off his criminal conviction. 
 
The required reform is to get the Thai Government out of the rice market and allow international buyers to purchase rice at the farm gate. 
 

 
Perhaps dealing with the massive wealth imbalance and lack of a minimum standard of living throughout the kingdom would help the situation as well.

Indeed, this horrendous desire among the poor for more is just going to be the downfall of everything.

[Tham1]

Thai auction = you will pay what we tell you or we will keep the sub standard crap we were trying to offload to you.

 

 

[marcusd]

167000 tonnes is way off the millions in hand

[billd766]

 

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.

 

 

 

Correct, GJ, this rice problem is nothing to do with the PTP, no, it's all about the Indians ending their rice export ban. Yes that is a typical way to defend the previous joke of a government, by appointing blame elsewhere. Does not seem to be working, though. Even a blind halfwit can see where this problem started. 

 

 

No they can't as the blind half wits are still trying to blame everybody else.

 

They are probably using Braille keyboards and MS visually impaired software to write as we post.
 

[mikemac]

 

 

The real problem is not the Military Government coming to terms with a price lower than than expectations (they are after all clearing up the mess left by the previous PTP Government).
 
 
The real problem is the fact that Thailand's rice farmers are now addicted to subsidy and feel they have an inalienable right to grow as much of a low grade product as they wish for a guaranteed price of almost twice the market rate, in the full knowledge that a man in Dubai will give them as much Government money as he can pipe their way in return for their unswerving support to his cause of getting off his criminal conviction. 
 
The required reform is to get the Thai Government out of the rice market and allow international buyers to purchase rice at the farm gate. 
 

 
Perhaps dealing with the massive wealth imbalance and lack of a minimum standard of living throughout the kingdom would help the situation as well.

Indeed, this horrendous desire among the poor for more is just going to be the downfall of everything.

 

 

Who would want to inherit this rotten mess left behind by the PTP ?  Could not see any Thai political party doing what the Military has done so far.

Full credit to them and to hell with their stupid, one-eyed detractors.

 

 

................................"Indeed, this horrendous desire among the poor for more is just going to be the downfall of everything.".............................

 

Which is why I was a bit surprised at the way Yingluck & co treated the poor rice farmers concerning the rice payments.

Why would you go to so much trouble buying all the love and loyalty (votes) of the people only to disregard them so as if they were not needed any more ?  (Did the Shins know the end was nigh and the people (their votes) were of no use to them now ?

Yingluck may have well announced on the Channel 3 News - "let them eat cake". 
 

[Thai at Heart]

 

 

The real problem is not the Military Government coming to terms with a price lower than than expectations (they are after all clearing up the mess left by the previous PTP Government).
 
 
The real problem is the fact that Thailand's rice farmers are now addicted to subsidy and feel they have an inalienable right to grow as much of a low grade product as they wish for a guaranteed price of almost twice the market rate, in the full knowledge that a man in Dubai will give them as much Government money as he can pipe their way in return for their unswerving support to his cause of getting off his criminal conviction. 
 
The required reform is to get the Thai Government out of the rice market and allow international buyers to purchase rice at the farm gate. 
 

 
Perhaps dealing with the massive wealth imbalance and lack of a minimum standard of living throughout the kingdom would help the situation as well.

Indeed, this horrendous desire among the poor for more is just going to be the downfall of everything.
 

 
Who would want to inherit this rotten mess left behind by the PTP ?  Could not see any Thai political party doing what the Military has done so far.
Full credit to them and to hell with their stupid, one-eyed detractors.
 
 
................................"Indeed, this horrendous desire among the poor for more is just going to be the downfall of everything.".............................
 
Which is why I was a bit surprised at the way Yingluck & co treated the poor rice farmers concerning the rice payments.
Why would you go to so much trouble buying all the love and loyalty (votes) of the people only to disregard them so as if they were not needed any more ?  (Did the Shins know the end was nigh and the people (their votes) were of no use to them now ?
Yingluck may have well announced on the Channel 3 News - "let them eat cake". 
 

They ran out of the facility to borrow money. They had the classic problem of cash flow and believed that they could sell to fund it.

Very dumb idea. They didn't want to leave the farmers without payment. That would be political suicide.