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Rice Production In Thailand Poised To Reach Record In 2012-2013


webfact

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It seems the article and misleading headline were written by a Thai.

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at[email protected]

Therefore, it is not surprising that the headline may be slightly misleading.

"Rice Production In Thailand Poised To Reach Record In 2012-2013"

"As everyone knows there is a vast difference between the meaning of "production" versus "sales" or "exports'

Producing rice may be easy providing there is adequate water available.

Selling that rice to the government at pledging prices is also easy, hence the vast stockpiles already.

Selling that rice onto the international market is more difficult due to expected high prices/returns.

Selling it at artificially low prices is called ;'dumping" and may cause Thailand a few problems.

There is a glut of rice on the market. Can Thailand's crops be sold without the country losing money? I think not.

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BANGKOK: -- Thailand, set to be the world’s biggest rice exporter this year, may harvest a record crop as a government plan to lift farm income boosted planting, said the Office of Agricultural Economics.

Production of unmilled rice in the year started October will increase 9.4 percent to 37.9 million metric tons from a year earlier, while planting area expanded 0.8 percent to 78.8 million rai

What a badly written article. Production and export is not the same thing. It is pretty obvious from the many reports over the past few months that exports are down massively this year, while production has miraculously risen almost 10% despite the fact that the total land being planted has barely changed.

It would appear that the suggestions of people reselling the same rice or selling imported rice to the scheme account for much of this sudden and dramatic increase.

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Perhaps all the excess rice can be used as landfill somewhere.

Sent from my GT-N7100 using Thaivisa Connect App

A better way to get rid of the rice mountain would be to make rice wine out of it, they can call it Chateau de Shinawatra, the world first grand cru rice wine and sell it to the all the silly HiSo's in Bangkok for an overprice.

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What an amazing turn around, from slipping behind the likes of India etc they are now poised to be #1 again !!

Or is this just another government's "white lie" to keep the farming communities spirits up??

Hopeful thinking.

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Thailand is in a bind over rice. If they sell at reduced prices that are less than the competition they will be taken to the WTO for dumping. The idea that they can sell it at higher prices has been shown to be false, based on the smoke & mirrors over ficticious G-to-G deals.

So all they can really do is sell at current market prices which will reveal the losses that they don't want to admit. Meantime, the rice mountain grows bigger & bigger.

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What an amazing turn around, from slipping behind the likes of India etc they are now poised to be #1 again !!

Or is this just another government's "white lie" to keep the farming communities spirits up??

Not much truth in this article. The rice in my local area was a bust this year because the rains did not come. The ones that have enough money are planting different crops for next year because they expect a poor year again......
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Shhhhh - it's called supply and demand, not what the Thai government says it should be.

Where are they going to put this next crop? (Rhetorically speaking.)

Supply and demand? Not since King George II perhaps. The prices are made at the future exchanges, and they produce the wild swings. If it's the same for rice as for oil, the speculation adds a premium of about 25%.

Where the price of rice is going is anybody's guess.

nr.gif

The harvest this year was probably so good because there weren't the floods of the previous years. I don't think is has to rot in warehouses, the demand for ethanol is high due to most vehicles using E80 or E90. Don't know if that's profitable, good chance with the high fuel prices.

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Shhhhh - it's called supply and demand, not what the Thai government says it should be.

Where are they going to put this next crop? (Rhetorically speaking.)

Supply and demand? Not since King George II perhaps. The prices are made at the future exchanges, and they produce the wild swings. If it's the same for rice as for oil, the speculation adds a premium of about 25%.

Where the price of rice is going is anybody's guess.

nr.gif

The harvest this year was probably so good because there weren't the floods of the previous years. I don't think is has to rot in warehouses, the demand for ethanol is high due to most vehicles using E80 or E90. Don't know if that's profitable, good chance with the high fuel prices.

There is technology at present that uses rice in a compounded form to manufacturebody panels for automobiles and types of plastics........even ammunition...I think T-land is hording the rice for Milatary purposes whistling.gif
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Shhhhh - it's called supply and demand, not what the Thai government says it should be.

Where are they going to put this next crop? (Rhetorically speaking.)

Supply and demand? Not since King George II perhaps. The prices are made at the future exchanges, and they produce the wild swings. If it's the same for rice as for oil, the speculation adds a premium of about 25%.

Where the price of rice is going is anybody's guess.

nr.gif

The harvest this year was probably so good because there weren't the floods of the previous years. I don't think is has to rot in warehouses, the demand for ethanol is high due to most vehicles using E80 or E90. Don't know if that's profitable, good chance with the high fuel prices.

Good point (reminder) about how the futures markets plays into the pricing of commodities such as rice. Also good idea about the ethanol but not sure if it is economically feasible .. only because I have not heard much about it being done. However, Thailand really should be leading the way in looking at the technology and research to make it feasible. Not only could they address the farm issue (which will never be fixed in terms of family farming being too profitable in an industrialized nation) but they could also address the issue of pollution while possibly leading the way in new technology while buying rice for such work at higher prices than rice meant for food consumption.

Edit: just found this article from earlier in the year http://riotimesonline.com/brazil-news/rio-business/surplus-rice-used-as-bio-fuel-in-brazil/#

Edited by Nisa
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There is technology at present that uses rice in a compounded form to manufacturebody panels for automobiles and types of plastics........even ammunition...I think T-land is hording the rice for Milatary purposes whistling.gif

Another good area for the government to invest in terms of developing technology and creating more of a demand for rice. would give a whole new meaning to rice-burners too.

Edited by Nisa
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Meanwhile, the rice weevils are busy laying eggs in the rice grains being stored in warehouses.

We run a retail operation in the US, and for the past few months, the jasmine rice imports from Thailand have been loaded with weevils.

The rice imports from Vietnam have been bug-free and cheaper. Hmmm...

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^ The thai government has set the market rate of rice in Thailand. It cannot export below that rate or it will be dumping. This is not a subsidy. There is always room for argument in these cases, but you can imagine that Thailand will be challenged if it starts to offload its stockpile at below the rate they have set.

That they have not sold a single verifiable kg from their stockpile so far is staggering, and I think they know they are in a big bind.

Edited by longway
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The price-paid goes up, and then production goes up in-response, somebody should make a note of this, and encapsulate it in an economic-law ! laugh.png

Now the clever bit, how to persuade the rest-of-the-world to buy it from the government, at well-above market-prices, before the warehouses run out of empty storage-apace ! wink.png

Or find a way for the government to sell last-year's rice, at the going-rate, without making a thumping-great loss ? Without having to indulge in false-accounting or 'white lies' or using front-companies for the transactions. sad.png

The commom market now the EU were doing this sort of thing over 20 years ago, whats new. beef mountains, butter mountains, milk lakes. And yes it was done to keep the EU farmers happy at the tax payers expense, and sold on at a loss or dumped.

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^ The thai government has set the market rate of rice in Thailand. It cannot export below that rate or it will be dumping. This is not a subsidy. There is always room for argument in these cases, but you can imagine that Thailand will be challenged if it starts to offload its stockpile at below the rate they have set.

That they have not sold a single verifiable kg from their stockpile so far is staggering, and I think they know they are in a big bind.

Do you have any idea if what we are paying for rice in Thailand is the cost including the government subsidy (lack of a better word) being paid to farmers or is the price more in line with market prices (no government mark-up to farmers)? If we're paying the hire price then it sounds like there would be a good opening for companies to start importing rice. I seem to recall the price of rice going up not long ago but at the time it seemed like a number of things went up. I also thought I read a while back the government may be paying double to farmers what the rice is worth but not sure if that was speculation on worse case scenario or what.

Anyway, really would be curious to know what price we are paying domestically for Thai rice.

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^ Its a fair point.

I remember a news story from last month that indicated that the USA may take legal action against Thailand if it sold its rice at a loss.

http://www.reuters.c...E8M9EJA20121109

Thailand has said it is determined to remain the top exporter, causing the USA Rice Federation to worry that the stocks bought by the government will be released onto the world market at a loss.

Edited by longway
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^ Its a fair point.

I remember a news story from last month that indicated that the USA may take legal action against Thailand if it sold its rice at a loss.

http://www.reuters.c...E8M9EJA20121109

Thailand has said it is determined to remain the top exporter, causing the USA Rice Federation to worry that the stocks bought by the government will be released onto the world market at a loss.

Funny thing about a lot of laws and regulations like this is they are usually over thought or under though but the bottom line is they rarely have anything to do with intention or justice. I guess having lawyers write the laws guarantees they will have job security when it comes to defending or enforcing the laws. I personally can see absolutely nothing wrong with Thailand exporting rice at a fair market value regardless of its cost or what it is sold internally for given the purpose of the price rise. However, I do really see a problem with their stock piling rice. I think they really ran into some bad luck that the number one exporter of rice couldn't drive prices up by withholding huge quantities of rice from the market. Not to mention that I think the scheme was the wrong approach to begin with ... at least in terms of my knowledge of the problem. You can't just hand out money to able bodied people with no plans of those people ever becoming self-sufficient. Short term it is fine but these farmers problems are not going to go away and only going to get worse. They need to start providing job training or education programs to them. I have a feeling even today their kids are not finishing school and the only life they will be trained for is farming and in terms of it being profitable to be a family farmer these days in this country or an industrialized one is pretty slim.

Edited by Nisa
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^ Its a fair point.

I remember a news story from last month that indicated that the USA may take legal action against Thailand if it sold its rice at a loss.

http://www.reuters.c...E8M9EJA20121109

Thailand has said it is determined to remain the top exporter, causing the USA Rice Federation to worry that the stocks bought by the government will be released onto the world market at a loss.

Funny thing about a lot of laws and regulations like this is they are usually over thought or under though but the bottom line is they rarely have anything to do with intention or justice. I guess having lawyers write the laws guarantees they will have job security when it comes to defending or enforcing the laws. I personally can see absolutely nothing wrong with Thailand exporting rice at a fair market value regardless of its cost or what it is sold internally for given the purpose of the price rise. However, I do really see a problem with their stock piling rice. I think they really ran into some bad luck that the number one exporter of rice couldn't drive prices up by withholding huge quantities of rice from the market. Not to mention that I think the scheme was the wrong approach to begin with ... at least in terms of my knowledge of the problem. You can't just hand out money to able bodied people with no plans of those people ever becoming self-sufficient. Short term it is fine but these farmers problems are not going to go away and only going to get worse. They need to start providing job training or education programs to them. I have a feeling even today their kids are not finishing school and the only life they will be trained for is farming and in terms of it being profitable to be a family farmer these days in this country or an industrialized one is pretty slim.

Bad luck doesnt explain the secrecy on sales from the stockpiles nor why it is engaged in a second round of the same policy. Total global rice exports are 30-40 million tonnes per year, Thai rice stockpiles will reach 20 million tonnes soon or more soon. More bad luck on the way perhaps.

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