Exporters: drought & strict bank rules push down rice & auto sales

BANGKOK, 22 July 2015 (NNT) – Exporters have slashed projections of rice and vehicle sales for this year, due mainly to the lengthy dry season and strict bank credit rules.

Thai Rice Exporters has scaled down its sales forecast from 10 million tons to 9.5 million tons, or 4.7 million dollars. The main cause is the unusually long drought that shrank rice production by 15-20 percent or 3-4 million tons. This has also led to a shortage of unmilled rice and a jump in its price accordingly.

Meanwhile, the Federation of Thai Industries (FTI) has reduced its domestic sales forecast from 950,000 units to 850,000 units, but retains its export target of 120,000 units. The FTI attributed its downward sales forecast to banks’ stricter credit rules, which require a 30 percent down payment instead of the previous 10 percent, in order to prevent a rise in household debt.

The FTI may adjust its export volume in the next three months, should negative factors become more pronounced.


-- NNT 2015-07-22

Isn't this a direct contradiction to the other "rice price goes up" thread?

Isn't this a direct contradiction to the other "rice price goes up" thread?

Not really.. price can go up because of less volume.. as sales are price x volume any change in either can result in a decrease.

So its quite possible because if production is halved i doubt price is doubled.

Just my interpretation of it.

I notice the Thai baht is not as strong over these last 2 weeks, I wonder if that will carry on the same

"The FTI attributed its downward sales forecast to banks stricter credit rules, which require a 30 percent down payment instead of the previous 10 percent, in order to prevent a rise in household debt."

As it should be. And not just a higher down payment to be required, but also an evaluation of the existing debt burden of the borrower.

These lending rules should be in place all the time. Crazy how banks always close the gate after the horse has bolted.

Isn't this a direct contradiction to the other "rice price goes up" thread?

Not really.. price can go up because of less volume.. as sales are price x volume any change in either can result in a decrease.

So its quite possible because if production is halved i doubt price is doubled.

Just my interpretation of it.

Hidden in the OP there's this sentence

"This has also led to a shortage of unmilled rice and a jump in its price accordingly."

Ummmmm......

Higher minimum down payments on car loans in Thailand are affecting the volume of vehicle exports?

I would like to learn more about this.

These lending rules should be in place all the time. Crazy how banks always close the gate after the horse has bolted.

Because there is always a change in bank management at times of crisis and at times of booms, and then back to crisis.

At times of booms, they look to increase volume and thus profit, the link to their bonuses, and then crisis strikes.

The board is fired and changed, and the new team tightens all loosen ends...until the next boom comes along.

Ummmmm......

Higher minimum down payments on car loans in Thailand are affecting the volume of vehicle exports?

I would like to learn more about this.

I think the export target is unchanged but domestic sales have fallen.

Though that final sentence I agree is odd and isn't explained in the article.

Edited July 26, 201510 yr by Bluespunk