Rice millers face cash flow problems due to dodgy middlemen

[webfact]

Rice millers face cash flow problems due to dodgy middlemen



BANGKOK, 7 April 2016 (NNT) - The Thai Rice Mills Association has called on the government to protect rice mill operators from suspicious exporters and middlemen.

The association held a seminar that was attended by more than 200 rice millers. Secretary-General of the Thai Rice Mills Association Kriengsak Tapananon said many rice millers are having cash flow problems, which he blamed on intermediaries who failed to compensate producers.

Mr. Kriengsak wants the government to mediate negotiations between rice millers and supply chain middlemen.

President of the Thai Rice Mills Association Manas Kitprasert said that rice farmers have also been affected by the rice millers’ cash flow problems. The lack of funds has forced rice millers to scale back their rice purchases from farmers. The knock-on effect will likely introduce fluctuations in the rice market.


-- NNT 2016-04-07

[clifric]

Now that they have been found out? What about the poor farmers?

[slapout]

If the middlemen are taking rice from the mills and then not paying, put their little arse in jail, take their bank accounts, and assets to pay off the mills. The mills could demand payment before rice leaves their storage and then that is solved. The mills should have cash to pay the farmer upon his delivery to them of his rice crop.Sounds like the same people who were involved in the last rice scam are alive, well and back in operation.

Do the business people not realize you have to have cash to start up and continue to do business, its amazing but

there seems to be no attempt to prevent scammers from getting into the pockets of the farm people in the ag business, by enforcement of laws or requirement to prove ability to pay for goods.

The only thing the government needs to do is get law enforcement (police)to arrest those not paying their bills, if police wont act have the army arrest both the police and those not paying their debts.

[djjamie]

government to protect rice mill operators from suspicious exporters and middlemen.

I remember not that long ago it was the rice millers that were suspicious along with the exporters and the middle man.

Things are on the improve then.

[Lunchbob]

Rice millers aren't the middlemen?

[Ulic]

I have no sympathy for the rice millers.

[Srikcir]

many rice millers are having cash flow problems, which he blamed on intermediaries who failed to compensate producers.

Here's what I surmise.

These "supply chain middlemen" are not wholesellers but rather intermediaries as stated. They coordinate sales between the rice millers and the foreign and/or domestic customers. Those customers may be wholesellers, direct sales customers or exporters. As such the intermediaries do not purchase the rice themselves but arrange for the purchase and collect basically a broker's fee upon consummation of the deal. In government-to-government sales the government acts as the broker but presumably takes no fee for the service.

But to line up customers, the middlemen or brokers will require a pledge of rice tonnage from the millers. You can't have competiting brokers offering to sell the same rice. Millers get paid for their rice when sales are consumated with the buyers. In Yingluck's rice pledge program the government took the role of a broker... the difference being that the government guaranteed a certain price for rice in any arranged sales.

One current problem for the rice brokers is that Thai rice exporters are reluctant to export to some traditional customers for fear that the customers may default in payments. This senario was the cause for rice exports for the month of February 2016 to drop to about 700,000 tons from January’s 1.2 million tons. This and other issues with finding reliable purchase points for miller rice has resulted in a slowdown on sales. That in turn has caused a significant delay in payments to the millers. This creates a cash flow problem for the millers.

I'm not sure what can be accomplished by the government mediating between rice millers and so-called supply chain middlemen. Without reliable end customers for the rice, the middlemen can do little to accelerate the sale of rice. Perhaps Prayut will duplicate his rubber buffer stock program, purchase rice directly from the millers and broker sales.

[BSJ]

I wouldn't lose any sleep over the alleged problems the millers are having!

[seedy]

Off Topic and Derogatory posts removed

[OMGImInPattaya]

many rice millers are having cash flow problems, which he blamed on intermediaries who failed to compensate producers.

Here's what I surmise.

These "supply chain middlemen" are not wholesellers but rather intermediaries as stated. They coordinate sales between the rice millers and the foreign and/or domestic customers. Those customers may be wholesellers, direct sales customers or exporters. As such the intermediaries do not purchase the rice themselves but arrange for the purchase and collect basically a broker's fee upon consummation of the deal. In government-to-government sales the government acts as the broker but presumably takes no fee for the service.

But to line up customers, the middlemen or brokers will require a pledge of rice tonnage from the millers. You can't have competiting brokers offering to sell the same rice. Millers get paid for their rice when sales are consumated with the buyers. In Yingluck's rice pledge program the government took the role of a broker... the difference being that the government guaranteed a certain price for rice in any arranged sales.

One current problem for the rice brokers is that Thai rice exporters are reluctant to export to some traditional customers for fear that the customers may default in payments. This senario was the cause for rice exports for the month of February 2016 to drop to about 700,000 tons from Januarys 1.2 million tons. This and other issues with finding reliable purchase points for miller rice has resulted in a slowdown on sales. That in turn has caused a significant delay in payments to the millers. This creates a cash flow problem for the millers.

I'm not sure what can be accomplished by the government mediating between rice millers and so-called supply chain middlemen. Without reliable end customers for the rice, the middlemen can do little to accelerate the sale of rice. Perhaps Prayut will duplicate his rubber buffer stock program, purchase rice directly from the millers and broker sales.

Whoever knew growing and selling rice was so complicated. I'm glad all I have to do is plop it in the cooker with some water and press a button ?

[slapout]

Its not the growing and selling of rice nor any other farm produced product, that leaves the farmers on the shot straw in each harvest. Its the monopoly that some groups /individuals have been grainted /purchased to purchase and deliver and sell to the buyers , domestic and overseas. these are who skim the cream off the top and make huge profits with the conections they have to get into this position.

Its just like the lottery that has, thankfully had the legal retail price of 40 baht enforced recently. Before the middlemen recieved rights to buy from government at low price ( less than 40 baht) and then charge those selling the tickets for what they set the price at, thus increasing price to the retail buyer by up to 60 baht+_Lottery tickets are sold by governments to raise money for the benifit of the taxpaying public, poor, handicaped, sick, charity groups, etc, not some wealthy group with connections to split up with dishonest politicians and their cohorts /families.

The middle man is not needed in the chain at all, if the taxpayer paid government employees were doing their job and set the distribution system up the way it should be.

[rubl]

many rice millers are having cash flow problems, which he blamed on intermediaries who failed to compensate producers.

Here's what I surmise.

These "supply chain middlemen" are not wholesellers but rather intermediaries as stated. They coordinate sales between the rice millers and the foreign and/or domestic customers. Those customers may be wholesellers, direct sales customers or exporters. As such the intermediaries do not purchase the rice themselves but arrange for the purchase and collect basically a broker's fee upon consummation of the deal. In government-to-government sales the government acts as the broker but presumably takes no fee for the service.

But to line up customers, the middlemen or brokers will require a pledge of rice tonnage from the millers. You can't have competiting brokers offering to sell the same rice. Millers get paid for their rice when sales are consumated with the buyers. In Yingluck's rice pledge program the government took the role of a broker... the difference being that the government guaranteed a certain price for rice in any arranged sales.

One current problem for the rice brokers is that Thai rice exporters are reluctant to export to some traditional customers for fear that the customers may default in payments. This senario was the cause for rice exports for the month of February 2016 to drop to about 700,000 tons from January’s 1.2 million tons. This and other issues with finding reliable purchase points for miller rice has resulted in a slowdown on sales. That in turn has caused a significant delay in payments to the millers. This creates a cash flow problem for the millers.

I'm not sure what can be accomplished by the government mediating between rice millers and so-called supply chain middlemen. Without reliable end customers for the rice, the middlemen can do little to accelerate the sale of rice. Perhaps Prayut will duplicate his rubber buffer stock program, purchase rice directly from the millers and broker sales.

" In Yingluck's rice pledge program the government took the role of a broker... the difference being that the government guaranteed a certain price for rice in any arranged sales."

Actually a bit more complicated than that. The RPPS 'guaranteed' farmers or their 'representatives' a nice price for paddy pledged, a price to be paid upon delivery for processing (or maybe after processing). Now of course that left the government with rice of which the minimum price required to become 'cost-neutral' was determined by what the government had spent. Any price negotiated above that would be a bonus for the government only

As we know this worked so well as to require the current government to schedule seven yearly reservations of 107 billion Baht to repay the BAAC.