Thailand’s rice exporters are against government plan to sell rice directly to overseas buyers, saying the move will hurt the interest of local rice exporters and cause sharp decline in international rice prices. The Thai government is under increasing pressure to offload rice from its stockpile of around 15-17 million tons before the new harvest season begins in October – November. However, so far, government has failed to meet the targeted sales from auctions, mainly due to low bids offered by traders. The Thai Commerce Ministry said today that it will also sell rice directly to foreign buyers to help reduce the government rice stocks, according to local sources. Rice will be sold directly to private or state-owned grain purchasing companies in other countries provided prices offered are not lower than those offered by local bidders. The government hopes to sell significant quantities of rice to countries like China and those in the Middle East through this new route. However, the Thai Rice Exporters Association (TREA) is opposed to direct sales of rice to private buyers in other countries. An official of TREA told local sources that the move will lead to direct competition between traders in other countries and Thai rice exporters. This will hurt the local rice export sector and economy, and may also cause global rice prices to crash, the TREA official says.
Aug 20, 2013
The Deputy Agriculture and Cooperatives Minister Warathep Rattanakorn says that the government may scrap the rice mortgage program in three years when farmer income is likely to see a noticeable improvement.
The Thai government began the rice mortgage program in October 2011, under which the government pays farmers up to 15,000 baht (about $480) per ton for white paddy rice and up to 20,000 baht (about $640) per ton for fragrant paddy rice, prices which traders say are about 40%-50% higher than market prices. While improving the income of farmers, the government also became the largest buyer of Thai rice and now has record stocks (around 15 – 17 million tons) due to high prices and low export demand. The government has spent around 650 billion baht (about $21 billion) to finance the program since 2011, about 30% higher than the planned 500 billion baht (about $16 billion).
The government is planning to sell about 1 million tons of rice from its stockpile every month to finance the program, but has failed to meet the target so far. The government rice auction this week to sell around 201,666 tons of rice drew a poor response once again, with only seven bidders participating and about 30,000 tons of rice sold. Last month, the government held two auctions. Only five bidders participated in the first auction for 350,000 tons and 90,000 tons sold, while in the second one for 200,000 tons, five bidders participated and only 120,000 tons sold
Thailand’s baht had its worst week since December 2006 on speculation outflows from emerging markets will quicken as the Federal Reserve prepares to cut monetary stimulus. Government bonds dropped.
The currency touched a three-year low of 32.17 yesterday. Global funds sold $917 million more of Thai bonds than they bought this month through yesterday, and pulled a net $903 million from equities, official data show. Thailand’s National Economic and Social Development Board cut its 2013 growth forecast on Aug. 19 as the nation entered recession for the first time since 2009. Policy makers were “comfortable” with a plan to pare stimulus, minutes of the Fed’s July meeting showed.
“Funds are flowing out from emerging markets, weighing on the regional currencies,” said Koji Fukaya, chief executive officer and foreign-exchange strategist at FPG Securities Co. in Tokyo. “The contrast is becoming clearer between the U.S., where the economy is recovering, and slowing growth in emerging countries.”
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Aug 20, 2013
The Deputy Agriculture and Cooperatives Minister Warathep Rattanakorn says that the government may scrap the rice mortgage program in three years when farmer income is likely to see a noticeable improvement.
The Thai government began the rice mortgage program in October 2011, under which the government pays farmers up to 15,000 baht (about $480) per ton for white paddy rice and up to 20,000 baht (about $640) per ton for fragrant paddy rice, prices which traders say are about 40%-50% higher than market prices. While improving the income of farmers, the government also became the largest buyer of Thai rice and now has record stocks (around 15 – 17 million tons) due to high prices and low export demand. The government has spent around 650 billion baht (about $21 billion) to finance the program since 2011, about 30% higher than the planned 500 billion baht (about $16 billion).
The government is planning to sell about 1 million tons of rice from its stockpile every month to finance the program, but has failed to meet the target so far. The government rice auction this week to sell around 201,666 tons of rice drew a poor response once again, with only seven bidders participating and about 30,000 tons of rice sold. Last month, the government held two auctions. Only five bidders participated in the first auction for 350,000 tons and 90,000 tons sold, while in the second one for 200,000 tons, five bidders participated and only 120,000 tons sold
Thailand’s baht had its worst week since December 2006 on speculation outflows from emerging markets will quicken as the Federal Reserve prepares to cut monetary stimulus. Government bonds dropped.
The currency touched a three-year low of 32.17 yesterday. Global funds sold $917 million more of Thai bonds than they bought this month through yesterday, and pulled a net $903 million from equities, official data show. Thailand’s National Economic and Social Development Board cut its 2013 growth forecast on Aug. 19 as the nation entered recession for the first time since 2009. Policy makers were “comfortable” with a plan to pare stimulus, minutes of the Fed’s July meeting showed.
“Funds are flowing out from emerging markets, weighing on the regional currencies,” said Koji Fukaya, chief executive officer and foreign-exchange strategist at FPG Securities Co. in Tokyo. “The contrast is becoming clearer between the U.S., where the economy is recovering, and slowing growth in emerging countries.”
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