7th rice auction fetches 1.05 billion baht with 1.4 billion baht loss

[webfact]

7th rice auction fetches 1.05 billion baht with 1.4 billion baht loss



BANGKOK: -- The Foreign Trade Department managed to sell only 112,000 tonnes out of 445,000 tonnes of milled rice put on auction worth about 1.05 billion baht in its seventh auction of the leftover rice bought under the rice pledging scheme of Ms Yingluck government.

Commerce permanent secretary Ms Chutima Bunyaprapat said that 12 bidders offered high bids but only four of them were acceptable and the sale amounted to just 25.36 percent of the rice put on auction.

She explained that the Foreign Trade Department did not announce the floor value for this auction but set a floor bidding price. However, she said that the auction this time fetched higher price than previous biddings after it was reported that Indonesia and Vietnam had placed purchasing orders for 500,000 tonnes and one million tonnes respectively.

An informed Commerce Ministry source disclosed that the government would lose about 14,000 baht per tonne for the 112,000 tonnes of rice sold by auction this time or 1.4 billion baht loss based on the cost of 24,000 baht per tonne.

11 auctions have so far been staged to offload the old rice stock bought under the rice pledging scheme. Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

Source: http://englishnews.thaipbs.or.th/7th-rice-auction-fetches-1-05-billion-baht-with-1-4-billion-baht-loss


-- Thai PBS 2015-10-15

[cloudhopper]

They'll make it up on volume...

[ramrod711]

11 auctions have so far been staged to offload the old rice stock bought under the rice pledging scheme. Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

How odd, very hard to understand how a self funding, well planned and skillfully managed scheme could result in such a calamitous loss. Thank you three times Yingluck. Is it any wonder that PTP couldn't find a bank that would lend money to prop up such a splendid enterprise?

[speedtripler]

Why is rice not cheaper in the Thai supermarkets yet ?

I bought a few packs in tops and I didn't notice any saving...

If it's being sold at a loss of 14k per tonne it should be less than half price?

[Hawk]

Why is rice not cheaper in the Thai supermarkets yet ?

I bought a few packs in tops and I didn't notice any saving...

If it's being sold at a loss of 14k per tonne it should be less than half price?

Cheap by wholesale but expensive by retail. Those pretty plastic bags are super expensive.

[speedtripler]

Why is rice not cheaper in the Thai supermarkets yet ?

I bought a few packs in tops and I didn't notice any saving...

If it's being sold at a loss of 14k per tonne it should be less than half price?

Cheap by wholesale but expensive by retail. Those pretty plastic bags are super expensive.

I don't use a lot so the cost is negligible... I eat "healthy" brown rice also which is not the type which was in the rice scheme pictures I saw, maybe it was never subsidised...

[halloween]

Why is rice not cheaper in the Thai supermarkets yet ?

I bought a few packs in tops and I didn't notice any saving...

If it's being sold at a loss of 14k per tonne it should be less than half price?

Because the loss is based on the inflated purchase price. It would probably be higher if the cost of storage was included.

If they tried to sell it at whatever they could get, rather than maintain a minimum, the price in the shops could halve. And nearly every rice farmer in the country would make a big loss.

[KittenKong]

If I keep rice in a bag in my cupboard for more than a week or two it gets riddled with weevils and God knows what other wildlife.

I wonder how the rice in that warehouse is?

[Thai at Heart]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

[sfokevin]

"11 auctions have so far been staged to offload the old rice stock bought under the rice pledging scheme. Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht"

So how much is still left to sell?

[EnglishJohn]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

The 500 billion never even made it to the farmers to pay for it.

100 billion did. The 500 billion is the amount 'lost' in the various 'costs' which made so many of the rich & influential people in the rural North even richer and successfully maintained their loyal support.

[Thai at Heart]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

The 500 billion never even made it to the farmers to pay for it.

100 billion did. The 500 billion is the amount 'lost' in the various 'costs' which made so many of the rich & influential people in the rural North even richer and successfully maintained their loyal support.

I don't think so. They have a stated cost of 24000 per tonne. Thus, they must be underestimating this cost, or they have a cost of 24k.

Either the cost and the loss is this or it isn't. You can't have it every which way.....

[bangrak]

And there are still 'negationists', à la Kittirat today, to declare the rice scam was profitable for the country... For sure 'thaksinomics' have created profits, for a few wealthy families, their dedicated followers, associated middlemen, storers, wholesalers, etc., NOT for the poorest farmers, for whom the 'scheme' was said to be (re-)introduced, but who were 'too small' to even participate in the 'scheme'... Thaksin and his acolytes know no shame, never did, never will!

To answer to 'Thai at Heart': does it really matter how much was lost to determine the dishonesty in the conception and execution of the scam? What difference should it make in the verdict whether a bankrobber will have stolen 500,000 or 5,000,000Baht, would the latter not be as guilty as the former according to you...?

[elgordo38]

Why is rice not cheaper in the Thai supermarkets yet ?

I bought a few packs in tops and I didn't notice any saving...

If it's being sold at a loss of 14k per tonne it should be less than half price?

More than likely the rice you bought went through the hands of the millers and middle men shipping costs and then the supermarket must make at least 50%. The idea in retail is keep the price high and this is turning them into sitting ducks. Once these true savings are passed on to you its game over for all the in between freeloaders. You see so many manufacturers now cutting out the middlemen and do business directly with the consumers. Its a sign of things to come. Bricks and motor, expensive real estate, huge parking lots,stock on shelves inventory costs, and what business considers as high priced help plus utilities and taxes will all disappear. Amazon direct shipping is a good example plus superior service. A big warehouse with automated robotic workers filling orders. I just watched one guy who worked on wall street and could not buy business quality shirts so he quit his job and started producing them. Customers do a laser measurement with their mobiles and he produces shirts and sells them for $69. He claims they are better quality than shirts he was paying $129 for. These new niche marketeers are the wave of the future. Goodbye Walmart and others.

[halloween]

Why is rice not cheaper in the Thai supermarkets yet ?

I bought a few packs in tops and I didn't notice any saving...

If it's being sold at a loss of 14k per tonne it should be less than half price?

More than likely the rice you bought went through the hands of the millers and middle men shipping costs and then the supermarket must make at least 50%. The idea in retail is keep the price high and this is turning them into sitting ducks. Once these true savings are passed on to you its game over for all the in between freeloaders. You see so many manufacturers now cutting out the middlemen and do business directly with the consumers. Its a sign of things to come. Bricks and motor, expensive real estate, huge parking lots,stock on shelves inventory costs, and what business considers as high priced help plus utilities and taxes will all disappear. Amazon direct shipping is a good example plus superior service. A big warehouse with automated robotic workers filling orders. I just watched one guy who worked on wall street and could not buy business quality shirts so he quit his job and started producing them. Customers do a laser measurement with their mobiles and he produces shirts and sells them for $69. He claims they are better quality than shirts he was paying $129 for. These new niche marketeers are the wave of the future. Goodbye Walmart and others.

Can you supply any evidence that supermarkets mark up basic food items by "at least 50%"?

[dcutman]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

The previous govt bought about 42 million tons of rice under this scheme are the numbers really that hard to figure out?

You are the self proclaimed economist.

Edited October 15, 2015 by dcutman

[billd766]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

Well if you buy rice at 15,000 thb per ton then add on the cost of transportation, storage and insurance (No figures are given by the PTP or the current government) to whichever government is in charge at the time, and then sell it at the world market prices there is bound to be a loss per ton.

The nominal price for Thai 5% broken rice in September 2015 was USD$ 358.77 or at today's exchange rate on XE currency converter 12,611.97 THB which is a loss of 2,399 THB per ton NOT counting transportation or storage costs. If the unknown costs of storage and transportation come to perhaps 5,000 baht per ton, a not unreasonable figure considering the storage time it could give a loss of perhaps 7,000 baht per ton or 7,000.000,000 per million tons of rice. That is 7 billion THB per million tons of rice or with a guesstimated 19,000,000 tons of rice in stock in 2013(but it could be more) of 133,000,000,000 thb. That assumes that all the figures are accurate (which they are not) and the market figures are correct. (I have no idea).

I personally believe the figure is much higher than that which I have given but at least I have tried rather than making a wag (wild ass guess) or totally ignoring or not believing any figure put out by the current government.

At 42,000,000 tons (see post #16 by dcutman) my estimated figure would be closer to 295,000,000.000 thb.

If you use Thai at home value post #12 of 24,000 thb cost plus dcutman estimate of 42,000,000 tons you can come up with a figure of 420,000,000,000 THB which isn't that far away from the 500 billion THB that the current government want Yingluck to pay.

The lack of figures from the PTP administration means that a lot of my figures are guesswork. Without a known starting figure (which the PTP REFUSED to give) hampers my results.

http://www.indexmundi.com/commodities/?commodity=rice&months=60

http://www.xe.com/currencyconverter/convert/?Amount=358.77&From=USD&To=THB

Edited October 15, 2015 by billd766

[Thai at Heart]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

The previous govt bought about 42 million tons of rice under this scheme are the numbers really that hard to figure out?

You are the self proclaimed economist.

I know the figures quite well. At the start of this govt they had 18mn tonnes in the warehouse and the total estimated loss was 500bn according to various parties.

Look at the calculation for the reported loss on this sale, and that average wouldn't get anywhere close to it.

Also they actually bought close to 80mn tonnes, but yielding loss through processing obviously reduces that. Either it's a big error in calculation or the real cost has to be massively more than 24k per tonne.

[Thai at Heart]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

Well if you buy rice at 15,000 thb per ton then add on the cost of transportation, storage and insurance (No figures are given by the PTP or the current government) to whichever government is in charge at the time, and then sell it at the world market prices there is bound to be a loss per ton.

The nominal price for Thai 5% broken rice in September 2015 was USD$ 358.77 or at today's exchange rate on XE currency converter 12,611.97 THB which is a loss of 2,399 THB per ton NOT counting transportation or storage costs. If the unknown costs of storage and transportation come to perhaps 5,000 baht per ton, a not unreasonable figure considering the storage time it could give a loss of perhaps 7,000 baht per ton or 7,000.000,000 per million tons of rice. That is 7 billion THB per million tons of rice or with a guesstimated 19,000,000 tons of rice in stock in 2013(but it could be more) of 133,000,000,000 thb. That assumes that all the figures are accurate (which they are not) and the market figures are correct. (I have no idea).

I personally believe the figure is much higher than that which I have given but at least I have tried rather than making a wag (wild ass guess) or totally ignoring or not believing any figure put out by the current government.

The lack of figures from the PTP administration means that a lot of my figures are guesswork. Without a known starting figure (which the PTP REFUSED to give) hampers my results.

http://www.indexmundi.com/commodities/?commodity=rice&months=60

http://www.xe.com/currencyconverter/convert/?Amount=358.77&From=USD&To=THB

http://www.xe.com/currencyconverter/convert/?Amount=358.77&From=USD&To=THB

You are assuming they pad 14k baht for this rice which was only possible for good grade hom Mali.....

[RubbaJohnny]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

The 500 billion never even made it to the farmers to pay for it.

100 billion did. The 500 billion is the amount 'lost' in the various 'costs' which made so many of the rich & influential people in the rural North even richer and successfully maintained their loyal support.

I don't think so. They have a stated cost of 24000 per tonne. Thus, they must be underestimating this cost, or they have a cost of 24k.

Either the cost and the loss is this or it isn't. You can't have it every which way.....

In normal regulated places I'd agree,I assure you locals can and do have it every which way in a culture where loss of face or money trumps legality and you can have as much justice as you can afford

[Srikcir]

It's a good thing, thanks to Yingluck, that the farmers needn't worry about any government loss in sales of the rice from the pledge program. They were paid in full at twice market value. What Yingluck didn't pay directly to the farmers during her administration in large part blocked by the EC and Constitutional Court, Prayut honored her obligation to the farmers and paid out the full balance.

[halloween]

It's a good thing, thanks to Yingluck, that the farmers needn't worry about any government loss in sales of the rice from the pledge program. They were paid in full at twice market value. What Yingluck didn't pay directly to the farmers during her administration in large part blocked by the EC and Constitutional Court, Prayut honored her obligation to the farmers and paid out the full balance.

You seem to think that paying for something at twice the value is a good thing to do, when in fact it was an electoral bribe which never made it to most of the voters suckered to think they would benefit.

[halloween]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

Well if you buy rice at 15,000 thb per ton then add on the cost of transportation, storage and insurance (No figures are given by the PTP or the current government) to whichever government is in charge at the time, and then sell it at the world market prices there is bound to be a loss per ton.

The nominal price for Thai 5% broken rice in September 2015 was USD$ 358.77 or at today's exchange rate on XE currency converter 12,611.97 THB which is a loss of 2,399 THB per ton NOT counting transportation or storage costs. If the unknown costs of storage and transportation come to perhaps 5,000 baht per ton, a not unreasonable figure considering the storage time it could give a loss of perhaps 7,000 baht per ton or 7,000.000,000 per million tons of rice. That is 7 billion THB per million tons of rice or with a guesstimated 19,000,000 tons of rice in stock in 2013(but it could be more) of 133,000,000,000 thb. That assumes that all the figures are accurate (which they are not) and the market figures are correct. (I have no idea).

I personally believe the figure is much higher than that which I have given but at least I have tried rather than making a wag (wild ass guess) or totally ignoring or not believing any figure put out by the current government.

At 42,000,000 tons (see post #16 by dcutman) my estimated figure would be closer to 295,000,000.000 thb.

If you use Thai at home value post #12 of 24,000 thb cost plus dcutman estimate of 42,000,000 tons you can come up with a figure of 420,000,000,000 THB which isn't that far away from the 500 billion THB that the current government want Yingluck to pay.

The lack of figures from the PTP administration means that a lot of my figures are guesswork. Without a known starting figure (which the PTP REFUSED to give) hampers my results.

http://www.indexmundi.com/commodities/?commodity=rice&months=60

http://www.xe.com/currencyconverter/convert/?Amount=358.77&From=USD&To=THB

Haven't you forgotten to allow for milling loss? The price quoted was for paddy IIRC.

[billd766]

Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

They had 18mn tonnes in the warehouse..........So where is this 500bn loss?

Well if you buy rice at 15,000 thb per ton then add on the cost of transportation, storage and insurance (No figures are given by the PTP or the current government) to whichever government is in charge at the time, and then sell it at the world market prices there is bound to be a loss per ton.

The nominal price for Thai 5% broken rice in September 2015 was USD$ 358.77 or at today's exchange rate on XE currency converter 12,611.97 THB which is a loss of 2,399 THB per ton NOT counting transportation or storage costs. If the unknown costs of storage and transportation come to perhaps 5,000 baht per ton, a not unreasonable figure considering the storage time it could give a loss of perhaps 7,000 baht per ton or 7,000.000,000 per million tons of rice. That is 7 billion THB per million tons of rice or with a guesstimated 19,000,000 tons of rice in stock in 2013(but it could be more) of 133,000,000,000 thb. That assumes that all the figures are accurate (which they are not) and the market figures are correct. (I have no idea).

I personally believe the figure is much higher than that which I have given but at least I have tried rather than making a wag (wild ass guess) or totally ignoring or not believing any figure put out by the current government.

At 42,000,000 tons (see post #16 by dcutman) my estimated figure would be closer to 295,000,000.000 thb.

If you use Thai at home value post #12 of 24,000 thb cost plus dcutman estimate of 42,000,000 tons you can come up with a figure of 420,000,000,000 THB which isn't that far away from the 500 billion THB that the current government want Yingluck to pay.

The lack of figures from the PTP administration means that a lot of my figures are guesswork. Without a known starting figure (which the PTP REFUSED to give) hampers my results.

http://www.indexmundi.com/commodities/?commodity=rice&months=60

http://www.xe.com/currencyconverter/convert/?Amount=358.77&From=USD&To=THB

Haven't you forgotten to allow for milling loss? The price quoted was for paddy IIRC.

Sorry, I was getting tired and fighting to stay awake by midnight. Long past my bedtime.

[fxe1200]

If I keep rice in a bag in my cupboard for more than a week or two it gets riddled with weevils and God knows what other wildlife.

I wonder how the rice in that warehouse is?

...riddled with "the lesser of two weevils".

Edited October 16, 2015 by fxe1200

[Bluespunk]

It's a good thing, thanks to Yingluck, that the farmers needn't worry about any government loss in sales of the rice from the pledge program. They were paid in full at twice market value. What Yingluck didn't pay directly to the farmers during her administration in large part blocked by the EC and Constitutional Court, Prayut honored her obligation to the farmers and paid out the full balance.

The EC didn't block any government payments.

They refused to sanction attempts by PT to buy off the farmers after the election was called. They didn't stop them doing it but made it clear any subsequent legal action would be on PT, not them.

In effect they upheld an election law that a caretaker government can't create debt for an incoming govt.

Edited October 16, 2015 by Bluespunk

[TallGuyJohninBKK]

An informed Commerce Ministry source disclosed that the government would lose about 14,000 baht per tonne for the 112,000 tonnes of rice sold by auction this time or 1.4 billion baht loss based on the cost of 24,000 baht per tonne.

11 auctions have so far been staged to offload the old rice stock bought under the rice pledging scheme. Altogether 4.66 million tonnes of rice were sold for 50.6 billion baht at a combined loss of 65.2 billion baht.

Thailand's rice pledging scheme -- the gift that keeps on giving and giving and giving....

[Srikcir]

It's a good thing, thanks to Yingluck, that the farmers needn't worry about any government loss in sales of the rice from the pledge program. They were paid in full at twice market value. What Yingluck didn't pay directly to the farmers during her administration in large part blocked by the EC and Constitutional Court, Prayut honored her obligation to the farmers and paid out the full balance.

The EC didn't block any government payments.

They refused to sanction attempts by PT to buy off the farmers after the election was called. They didn't stop them doing it but made it clear any subsequent legal action would be on PT, not them.

In effect they upheld an election law that a caretaker government can't create debt for an incoming govt.

When the parliament was dissolved so that another election could be held, the government went into "caretaker" status. According to the Constitution, any funds borrowed by the government must be APPROVED by the EC. The EC refused. Yingluck appealed to the Constitutional Court who upheld the EC decision not to allow the government to borrow the funds.

When Prayut overthrew the government, he abolished the constitution and removed the legal constraints that prevented the government from borrowing. He then bypassed the EC and the Court to pay off the rice farmers in the pledge program using 10-year treasury bonds. Now the Ptrayut government holds Yingluck personally accountable for the spent funds.

[halloween]

It's a good thing, thanks to Yingluck, that the farmers needn't worry about any government loss in sales of the rice from the pledge program. They were paid in full at twice market value. What Yingluck didn't pay directly to the farmers during her administration in large part blocked by the EC and Constitutional Court, Prayut honored her obligation to the farmers and paid out the full balance.

The EC didn't block any government payments.

They refused to sanction attempts by PT to buy off the farmers after the election was called. They didn't stop them doing it but made it clear any subsequent legal action would be on PT, not them.

In effect they upheld an election law that a caretaker government can't create debt for an incoming govt.

When the parliament was dissolved so that another election could be held, the government went into "caretaker" status. According to the Constitution, any funds borrowed by the government must be APPROVED by the EC. The EC refused. Yingluck appealed to the Constitutional Court who upheld the EC decision not to allow the government to borrow the funds.

When Prayut overthrew the government, he abolished the constitution and removed the legal constraints that prevented the government from borrowing. He then bypassed the EC and the Court to pay off the rice farmers in the pledge program using 10-year treasury bonds. Now the Ptrayut government holds Yingluck personally accountable for the spent funds.

You seem to recognise that it is unconstitutional for a caretaker government to borrow, as decided by the CC.

He "abolished the constitution and removed the legal constraints that prevented the government from borrowing." Where in any constitution was illegal for a new government to borrow? Why was it necessary for a scheme that was supposed to make billions, or at least be cost neutral?

The debt to the farmers was incurred by the Yingluk government. Reneging on those debts would have destroyed the government's credibility and ability to borrow. Who is responsible for a debt, the person who incurred it, or the guarantor forced to make payment?

[jadee]

Can't believe they are still selling that old rice in 2015, it must have been stored well.