Wednesday, April 2, 2014

On the bounce

The past few weeks have resulted in less press for rice growing and rice exports regionally. It's probably because the Thai rice bubble has burst, the worst possible scenario for Thai farmers: pledges will go unpaid, prices are falling and there's going to be no alternative for the foreseeable future.

The scenario is now also resounding throughout the region. Thailand now lays claim to being the no. 1 world exporter once again. But that is thanks to the need of the Thai government to off-load it's deteriorating stocks. The source, so mentions The Nation (Mar. 24) is CP Intertrade. Based on figures of the first 2 months of this year it estimates that Thailand is back on top. It also notes that this comes at a price: lower prices for exporters.

Giving weight to this assumption, oryzae.com notes that the income for the extra amounts dropped by 10% ...
'Thailand has exported 696,558 tons of rice in January 2014, up about 20% from around 580,983 tons exported in January 2013, according to the Thai Country Chamber and Office of Import-Export Goods Standards. However, in terms of value, Thailand’s earnings from rice exports declined to around $376.51 million in January 2014, down about 10% from $416.23 million earned during the same period in 2013'.
And as could be expected, Thailand's gain is Vietnam's wane. Again oryzae.com (Mar. 3) mentions that Vietnam's exports are down by above 10% for January 2014. A solution to Vietnam's woes: to stock up and wait for better times, presumably after April ...

The lower prices are also affecting prices in Cambodia itself. Phnom Penh Post (Mar. 3) has an article on the losses for Cambodia. With harvests already stored, it's mostly the traders who will get stuck with declining stock value while having lent money to purchase the stock. The article also adds a soothsayer:
'Exporters and rice millers should keep their fragrant rice paddy and wait until the supply in the global market declines, advised Srey Chanty, an independent economist who focuses on agriculture issues.
“I think in the next three or four months, the fragrant rice price will bounce back to normal,” he said'. 
Now I don't believe he will be putting his own money in this thought ...

Such is the dire consequences that even the Bangkok Post sees the need to report on this (Mar. 3) quoting oryzae.com that prices for Cambodian rice had dropped by 7%.

And then today, the Phnom Penh Post notes an overall drop in rice exports from Cambodia:
'As Thailand sells its rice reserves and reforms in Myanmar are rewarded with more access to markets abroad, Cambodia’s total exports of milled rice are on the decline, falling more than 10 per cent in the first quarter of this year compared with the same period in 2013, according to industry insiders'.
Adding insult
As has been reported earlier in this blog, the EU are starting to flex their muscles trade-wise. Co-incidence or not, it comes after political uncertainty, have the rulers won the last election or not? 
Next up are fish exports, so reports the Cambodia Daily (Mar. 24):
'The European Commission (E.C.) will today ban all fish imports from Cambodia, carrying through on its threat made in November to punish the country for failing to show genuine commitment to tackling the global problem of illegal fishing, according to a memo released Friday'. 
Part of the problem seems to be lack of regulation.

Earlier in the month the EC also took aim at the sugar exports of Cambodia, though somewhat reluctantly it seems. 
There does seem to be a direct correlation between the number of land-conflicts and the recent surge in exports (quadrupling) of sugar from Cambodia. And it does help that the government is now weakened. 
The Cambodian side though is playing fair weather:
'He [Council of Ministers spokesman Phay Siphan] added that calls for the EU to use its sizeable aid as leverage on the government was not constructive.
“No one is the master, we are partners … [with] a different culture and a different mindset. [But] it doesn’t mean that the government is not doing anything to improve that. We [work] daily to tackle the issues.”
More problems on the rice export horizon: hackers. The Phnom Penh Post (Mar. 21): 
'Cambodia's rice industry has come under attack in recent months from online criminals attempting to defraud buyers and disrupt exporters’ websites, industry insiders say'.

Wednesday, February 26, 2014

Hypocritical

I could spend a huge amount of this blog on the on-goings in Thailand: rational analysis, past present and future. But I am not.
Much of what has played out in the last few weeks in Thailand concerning rice pledging and political scheming was to be expected. Government is weak and has problems continuing programme: the dèja vu! It's all great when you start the rice pledge programme, but it's like a drug: there's no way you can stop. without tears that is.
So yesterday, Thai farmers were in arms, today it's believed they might get their pay, so they are back on the land. Thai government corrupt? Oh no! Not again!
Despite the good years, it's odd to see how fast some farmers are to switch their allegiance ...

Well what else is there to report about?

Rules, my a**?
We could start off by looking at how Cambodia is struggling to market it's rice. The Phnom Penh Post (Feb. 17) reports on stringent rules concerning providence of it's rice export so as to prove to Europe that yes indeed it is Cambodia produce.
'Exporters requesting a certificate of origin from the Ministry of Commerce will be required to show proof through invoices and receipts that the rice is local.
An audit committee consisting of both industry and non-industry representatives is tasked with investigating claims of fraud.
Penalties include the permanent revocation of an exporter’s certificate of origin, which strips the business of duty-free access to Cambodia’s largest market'. 
If this were to happen, the cost of exporting Cambodian rice just got more expensive and wrought with administration, yea! Note that David Van in a comment says it's bollocks, there is no need for a certificate. So article wrong?

Earlier this month (Feb. 4) the Phnom Penh Post had a re-cap / re-hash on the story. 
Italy seems to be lobbying for denying no-tariff imports for Cambodian rice. It's unfair to Italian farmers. This despite the fact that Italy produces different rice and hardly any note-worthy exports from Cambodia. Reaction:
'David Van [there he is], deputy-secretary general for the Alliance of Rice Producers and Exporters of Cambodia, said in an email yesterday that it was hypocritical of the Italian government to claim developing countries were receiving unfair subsidies, as European countries have long benefited from similar EU deals'. 
Trouble is that the importing country sets the rules ....

Lower market prices for Thai rice result in poor conditions for Cambodian rice exports, (Phnom Penh Post, 20 Feb.):
'Stockpiles accumulating since the [Thai rice pledging] scheme was introduced in 2011 have risen to record levels [in Thailand], and an anticipated fire sale has buyers holding out in anticipation of cheap rice flooding the market. Cambodia and other countries are taking the hit'.
Exporters must decide: to move their stock or to accept lower prices. 

Elsewhere, the importance of rice and rice exports to Cambodia was highlighted through a World Bank assessment which highlighted how the number of poor in Cambodia had halved since 2004. Main reasons were increasing prices for rice and higher productivity. 
Especially higher prices seems to contradict common logic which says that low prices are good for the poor. They're not.
The article in the Cambodian Daily (Feb. 21) also highlights that though the poor has halved, most now languish in the near-poor category!

Resistance
Or we could note that Burma exports are increasing to Japan (Nation, Feb. 7). As well as smuggling to Thailand. Britain's Telegraph (Feb. 4) has a first-hand report from Burma, opposite Mae Sot, where large scale smuggling is taking place.

Meanwhile in Laos, farmers are apparently defying private armies trying to rob them of their lands (Radio Free Asia, Jan. 22), now why is this not a headline? 
'In a rare act of resistance, dozens of rice farmers in northern Laos have defied armed police orders to vacate land seized by a Chinese company wanting to build an airport as part of a casino-driven special economic zone, according to villagers.
The 50-odd farmers refused to budge when policemen, armed with AK-47 assault rifles, moved on Friday to enforce an order by the King Romans (Dok Ngiew Kham) Group for the farmers to leave their rice fields to make way for the construction of the airport in Tonpheung district in Bokeo province'.
Then in the Philippines where rice smuggling, or rice importing at inflated prices is all the rage. But those pinpointed alleged receivers are suddenly not fit to face a Filipino Senate committee (Oryza, Feb. 24).

Up your street
Or we could note that Thai research has found out that their farmers are a lot worse off than Vietnamese and Burmese farmers (despite the higher prices?). Thai farmers are hampered by the high cost of inputs so concludes the article on the research by University of the Thai Chamber of Commerce (Bangkok Post, Feb. 26).
But a quick flick through the article learns that the low productivity is the crux of the discussion and probably the high cost of labour, it's not clear.
Even worse is the conclusion, that it in part is due to the governments rice-pledging scheme. That seems to be the world upside down. But yes, that's how it is seen. The backers are requesting the government (which one?) to use subsidies to drive down production costs. 
But how? Will they want to lower labour wages? Give hand-outs to fertlizer and chemical producers? 
If you believe rice-pledging was hampered by graft and accountability, then why would you propose even less accountable alternatives?
One mistake (besides graft and accountability; no matter what you do these will always remain a problem in the Thai context) the government made was to think that the rice pledging programme would be self-sufficient: hoarding would lead to higher world prices. Market conditions were not so and the government failed to act.
And now I still being sucked into the discussion ....

Anyway, Siam Kubota's profits will drop so reports the Bangkok Post (Feb. 25 ) mainly due to lower purchasing power of farmers because the price for rice is lower. So, obviously the reverse is true, the rice-pledge has lead to increased investment. Or not?

And the Bangkok Post (Feb. 24) has a rather lengthy exposé in which they calculate that organic rice growing is as profitable as for non-organic. So if their consequence support for lowering input prices (above) is thought through, this would be distorted and yes the subsidies would mean more chemicals on the farms, good to see Bangkok Post jumping on this bandwagon!

Thursday, January 23, 2014

Controversy

Desire
Allow Golden Rice Now so is the name of the organisation which explicitly wants Greenpeace to stop their protests against GM rice.
'Campaign spokesman Dr. Patrick Moore is a Phd ecologist, award-winning scientist, author and educator. He believes the opponents of Golden Rice have no evidence to justify a ban on researching and developing it, as it is a food that could end untold human suffering and the death of millions of people'.
Hmm, but it is not a Trojan horse, opening the rice seed sector to privatised GM companies? If Golden Rice is so good why has it not already persuaded opponents? And is everyone waiting for GM rice that hardly contributes to the solution? Why not add vit-A to f.i. beer and ask everybody to drink more beer? I stand by the argument that Golden Rice hardly results in a solution, but in the meantime will rob a great deal of rice growing communities worldwide the ability to take their own decisions on what (and what not) to plant and the acceptance will result inless desirous business practices to expand worldwide.
See also the September update and October update the pro's and cons of Golden Rice.

One practice from yesteryears is assisting poor communties with strings attached help. The Philippine Star reports (Jan. 22) that Bayer CropScience are helping cyclone victims. By giving farmers hybrid rice seeds.
'This is our way of helping out our farmers in Leyte and Samar to get back up on their feet after the devastation to their lives and livelihood.”
"We believe that the faster they can start planting rice, the better for them as it will help take their minds away from the disaster and start rebuilding their lives," explained Bayer CropScience Managing Director Hans-Joachim Wegfarht'.
Take care
If we had any hopes of the Thai situation taking a upswing, we'll have to make a rethink. 
As for news on the rice pledging, this is also degenerating. With possible elections forthcoming is the current government able to authorise budget expenditures on rice-pledging? The Nation (Jan. 8) reports on the doubts. Can the government pay farmers who have already pledged. Can the government sell pledged rice? No one knows, so nothing will happen ... 
But no, so the Bangkok Post reports (Jan. 22): 
'The caretaker government has decided to proceed with plans to borrow 130 billion baht to fund its controversial rice-pledging scheme. The Election Commission (EC) has resolved it lacks the authority to approve the loan'. 
The Nation reports similar.
With the government weakened the national Anti-Corruption Committee feels safe enough to start a probe into the PM's role in the rice pledge scheme (Jan. 17, Bangkok Post). Basically they are accusing the PM in her role as overseer of the rice pledge programme of negligence, which just shows how politicized the committee is. Surely there is enough corruption to keep the committee busy without seeking out negligence as an excuse to charge a weakened PM.

From the other side there is mounting pressure from farmers (Nation, Jan. 18), especially those who have yet to see their money returned. I suppose they can assume that they won't get their money ... 
A day later the same newspaper is still milking the same story. Then a few days later (Jan. 22) the Nation notes that the disastified will join all the protesters on the streets of Bangkok ...

Export
The Cambodian Daily (Jan. 3) reports on strong export figures from Cambodia:
'Rice exports increased from 205,717 tons in 2012 to 378,856 tons in 2013 as a result of high demand from the European Union as well as countries in Asia, according to figures released Thursday by the Ministry of Agriculture'.
Oryzae.com notes that Cambodiia still believes the 1 million export is still attainable by 2015. 

A Korean company hopes to import Cambodian rice, a possible break through in this part of the world (Phnom Penh Post, Jan. 22).

Furthermore one should notice that now the ANZ bank is under fire for supporting alocal sugar company. Exporting rice is in this regard is a lot 'cleaner'. 

Wonder
The Business Insider reports (Dec. 3) on a wonder-gene which could boost rice production by as much as 30%. Again the age-old saying seeing is believing. And we would need to know the economics behind this and the potentail availability. If indeed available with conventional breeding techniques, our hybrid rice companies will loose another argument to promote their offspring ...

Sunday, December 29, 2013

Acknowledging

Forthcoming for the rice market is the political crisis looming in Thailand. Events being played out seem to suggest that a political status quo is not on the offering and any change will most likely see the rice pledging scheme shelved or changed dramatically.

What will occur is a downward push on global prices. Thai rice exports will restart on market conditions leading to an overall price drop; there's simply too much rice stocked at the moment and the malfunctioning of the Thai exports has made many a country see their own possibilities in exporting rice. 
And buyers can safely turn to other countries to satisfy their demands.

The Nation (Dec. 2), nearly a month ago has it's idea's on the future ahead for the rice pledge scheme: 
'There were signs the government wanted to back away from the policy, or at least scale it down. But politics came into play and the most ambitious pledges to the farmers were maintained.' 
So they suggest taking it off the agenda and letting experts suggest improvements.

Cambodia's mixed bags
Let's leave the Thai politics aside and concentrate on Cambodia. Their rice exports in particular.

Cambodian nascent rice exports to Europe are in hot water. Claims are made that up to 30% of the exports are in fact of Vietnamese origin (Oryzae, Dec. 19). 
Provenance, such an important aspect of the global trade rules affects many an agricultural item in the lower Mekong where age old trading routes don't necessarily follow modern day borders. Many an agriculture item moves over the border  especially to Thailand with it's higher prices and to Vietnam with it's more aggressive exporting strategy. 
So it's no surprise that cheaper Vietnamese rice might make it s way towards Vietnam, likewise Cambodian rice heads to Thailand.

But Cambodian exporters are refuting the claims (Cambodia Daily, Dec. 23): 
'Van Vichet, the deputy secretary of ARPC (Alliance of Rice Producers and Exporters of Cambodia) , said that while the association had agreed to create a code of conduct, it denied Cambodian rice was being contaminated before being exported to Europe.
He said that the accusation was the political result of recession-stricken rice farmers from European countries lobbying E.U. officials to reintroduce tariffs for rice imported into Europe'. 
Deny, shift the blame (link to Oryzae article, Dec. 17, with some European nations complaining about imports but with no substantiation).
And: 
'Commerce Ministry spokesperson Kong Putheara agreed with Mr. Vichet’s rejection and said that any tests of Cambodian rice exports to the E.U. would confirm that the rice is all grown locally.
“What factors have the E.U. based this claim on that 30 percent of rice exports from Cambodia contain rice from Vietnam? Have they looked at the DNA or have they looked at other factors?” he asked.
Mr. Putheara acknowledged, however, that exported Cambodian rice is often sent to Vietnam, where it is milled, before being exported'. 
Officials know little ...

The EU responds. The Phnom Penh Post reports (25 Dec.): 
'While the European Union Trade Commissioner Karel De Gucht never told the Ministry of Commerce that Cambodian rice was “30 per cent” mixed with the same product from Vietnam, he did say Cambodia had to better ensure that its harvest was homegrown and not from another country, a spokesman for the commissioner said yesterday'. 
The measured response would be as such:
'In response to the trade commissioner’s concerns, the Alliance of Rice Producers and Exporters of Cambodia (ARPEC) will form a Code of Conduct in a bid to protect the country’s rice exports.
ARPEC said in a statement released yesterday that all Cambodian rice exporters had taken note of the views and would sign the Code of Conduct with the Ministry of Commerce to self-regulate exports'. 
But when do you need to stop?
'ARPEC deputy secretary David Van said the issues raised in the Oryza article were informal and emanated from rumours within “EU circles”.
“As far as the rice exporters are concerned, we maintain that until clear evidence is produced by the EU, we do not condone their claims,” he said.
In response to suggestions that some Cambodian rice could be contaminated during transit to Vietnam-based milling facilities, Van said the external process does not mean the two rice origins are mixed. He added that the low supply of Cambodian milling facilities producing the country’s rapidly increasing harvest forces farmers to send their rice to Vietnam for milling.
“But all rice grown, harvested, milled and exported in Cambodia is 100 per cent our product,” Van said'. 
Collecting evidence need not be such a problem ... Ah but wait for it, a correction (Cambodian Daily, Dec. 26):
'In the story “Rice-Exports Alliance Rejects EU Accusations” (December 23), I was quoted as saying that “some of our rice millers take rice and hire Vietnamese millers to mill it and then bring it back to Cambodia for export.”
I would like to clarify that the rice exported to the European Union. is 100 percent made in Cambodia.
All aspects of the rice production are completed in Cambodia; moreover, the rice is also checked and issued a certificate of origin before being exported from Cambodia.
Kong Putheara, spokesman, Ministry of Commerce'. 
Oops.

Of prices & exports
The Bangkok Post (Dec. 4) quotes the UN's agricultural arm, the F.A.O.: 
'Thailand will see a 17% jump in its rice stockpiles to a record level next year as it pursues a policy of buying from farmers at above market rates, the Food and Agriculture Organisation (FAO) said on Wednesday'. 
So that spells more bad news for lower pricing in the future. It also notes: 
'The expansion of Thai stockpiles will help global milled reserves gain 2.6% to 179 million tonnes in 2013-2014, rising for a ninth year, said the FAO. World rough-rice production will expand 1.1% to a record 741.1 million tonnes, with Thai output rising 3.9% to 38 million tonnes.
"Greater competition resulting from an increase in Thai supplies in the world markets is expected to come to the detriment of a number of suppliers,'' said the FAO, citing India as the most at risk'.
The Thailand Development Research Institute (TDRI) had a recent forum on the future of global rice. So reports the Nation (Dec. 17).  The bad news: increasing incomes means an evening off of consumption with possible drops by 2050 while at the same time a shift to more quality rice. The good news: there isn't any! Recommended is for Thai farmers to increase efficiency.

The Bangkok Post (Dec. 17) quotes sources from Thailand's rice exporting association: 
'Rice buyers remain reluctant to purchase Thai rice even though prices are now competitive with Vietnamese grain. "This is unusual, as Thai rice prices are now quoted at about the same price as Vietnamese rice," said Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association. "The free-on-board prices of 5% white rice, for instance, are only US$420 per tonne, but we still can't find buyers. This has never happened in Thai rice trading."'
Are buyers waiting for prices to drop more?

The year that was. For Thai exports: wilting ... (Bangkok Post, Dec. 27):
'The government acknowledged for the first time rice exports in 2013 will reach a mere 6.68 million tonnes worth US$4.38 billion, down by 3.9% and 7.9%, respectively'.
But are they correct?
'"If the government's rice stock sales made up 60% of the country's overall rice shipments, this is tantamount to the government selling as much as 3-4 million tonnes and the private exporters selling only only 2 million tonnes," said Mr Chookiat [honorary president of the Thai Rice Exporters Association ]. "This is impossible. Parboiled rice, which is sold only by exporters, is equal to 2 million tonnes this year. That would mean the exporters sold hardly any white rice".' 
It also notes that the anti-corruption committee will look into government-to-government trades.

Sector news
Mekong Oryza will export CEDAC's organic rice, so reports the Phnom Penh Post (Dec. 13).

What Cambodian exporters are up against? The Cambodian Daily (Dec. 24) goes into details of a truck carrying rice that has been impounded by police as it was above the maximum weight. Not so surprising, but the owner claims foul. Faulty scales. Will be continued.

More about winning the globe's best rice prize. The Phnom Penh Post has a nice article (Dec. 20) with the views of what may lie ahead. Challenges are funding, lower energy prices, poor logistics, high transportation costs and poor pr.
  
The Vientiane Times (Dec. 20) notes that Europe certifies rice from the province of Savannakhet: 
'Savannakhet has exported its first shipment of rice to European markets after attempting to enter one of the largest agricultural markets in the world for several years.
This year the province exported almost 2,000 tonnes of rice worth US$1.2 million in total, after European countries certified the standard of product as fit for sale in their markets, according to the Industry and Commerce Department'. 
FAO call for a pan-Asian rice strategy. Why? To avoid price crisis? It calls for increased efficiency. The nation (Dec. 1) has more background. Seems futile.
 
Vietnamnews (Dec. 25) mentions that Vietnamese rice is now regarded as the most expensive Asian rice. interestingly it notes that one of the reasons is that Thailand is selling older rice, thus Vietnamese rice is fresher and gets a better price. noteworthy is also that if price disparity continues Vietnam might buy Thai rice to market domestically freeing up domestic produce for export!

Unapproved
When is a GMO a GMO? We've seen this discussion before. China are hardly known for their anti-GMO stance. In fact they are one of the staunchest proponents. So it's a bit strange to see that they have rejected U.S. corn product imports because the imports were of GMO's whereby a strain had not been approved yet! Sourced from Reuters (Dec. 26):
'China has turned away about 2,000 tonnes of U.S. dried distillers grains (DDGs), a corn by-product, and more rejections are expected in coming weeks as Beijing imposes strict checks over an unapproved genetically-modified (GMO) strain, traders said on Thursday.
The move follows the rejection of more than half a million tonnes of U.S. corn after authorities detected the presence of MIR 162, a GMO variety developed by Syngenta AG and not approved for import by China's agriculture ministry'.
More on the background:
'Strict testing for MIR 162 comes as Beijing seeks to curb cheap corn imports and support domestic prices for the grain, industry sources have said.
The U.S. has urged China to act promptly to approve the strain'.
Seems that this is picking hairs.

Saturday, November 30, 2013

Abbreviated

An interesting article throwing up SOME NEW quandaries was to be found in the NZ Herald (Nov. 2). 
Focusing on pine it raises the question, when is GM GM? discussing new technologies:
'They are novel DNA-changing techniques that blur the lines around what is and what isn't genetic engineering. Their names alone are fuse blowing: zinc-finger nuclease (ZFN), TALENs (transcription activator-like effector nucleases), cisgenics, oligo-directed mutagenesis (ODM) and others.
These molecular technologies, which target specific genes, offer potential to breed crops, trees and animals with desirable traits and block out less desired aspects more accurately and efficiently than traditional GM and non-GM techniques'.
And though the at the heart of this New Zealand discussion is pine, it also notes that it could erode NZ's green food image:
'It sets up the potential for exporters to inadvertently send traces of a ZFN organism to Europe and potentially trigger market objections," Terry says.
He cites kiwifruit as an example of a crop that could be inadvertently contaminated through the spread of pollen from pines with ZFN-altered DNA'.

At stake of course is what is what. If GMO is to be avoided, what is ZFN? And what lies ahead? Does anyone have an answer? Or are we to leave the dicussion for scientists (= trustworthy?), activists, businesses or lawyers   ....?

Thai state of affairs
While Thailand sees yet a implosion, it's rice pledge scheme is at the heart of not only it's critiques but also in the center of the political struggle. Despite all it's misgivings the largely rural electorate sees rice-pledging as it's return on investment.

It's thus funny to see the opposition trying to make hay out of the scheme (Nation, 28). As if they have a ready answer for the non-urban electorate. And as the PM says, we know what the shortcomings are, no news there.


In the past month the IMF waded into the Thai debate slash quagmire (Bangkok Post, Nov. 13). 
It urges a rethink. 
Because it is eroding public confidence in Thailand's finances. 
Well, so may be, but confidence in the country has long ago ebbed away and the constant cycle of protest / counter protest / election landslides and mini-coups has a lot more to do with that ....

The Thai government though, believe they are in the good. According to the Nation (Nov. 13): 
'This helps boost the economy, as farmers’ income will rise and their debt will decline. As such, their purchasing power is increasing ...'. 
There's no counter-argument? 
Well, the cost of the scheme may not reflect well on the benefits, the potential for financial ruin remains. Debt may well go up. Too much middle man involvement (reading skimming). And graft possibilities.

So it's not so strange to hear of delayed payments to farmers. Where is all the money coming from? And how to pay for the rice buying? The answer are bonds. 
The Bangkok Post (Nov. 20) notes that the government will put a 3-year bond on the market to finance further purchases. Will it be succesful? It might as it provides higher returns for investors. And more debt for the government ...

However, despite this cash infusion (and delay in payments), liquidity of Thailand's agricultural bank (BAAC) seems to be ok (Bangkok Post, Nov. 23).
'Previously, the Public Debt Management Office (PDMO) disclosed a plan to raise funds of 140 billion baht for the 2013-14 main crop, with 75 billion baht to be raised through government bonds to finance the scheme and borrowing in the form of term loans. "Part of the proceeds from the PDMO will be used to repay the bank for the accrued debt from the subsidy where it is supposed to be cleared by thefiscal-2014 budget. The bank's liquidity crunch is an immediate crisis, so we need to use the budget to handle this first," said Mr Tanusak. He insisted that by doing so, the government's paddy scheme is financially manageable'.
That's why there is no need for the sale of bonds? That might contradict earlier plans, so lets assume they are still on the rails. The rice pledge scheme will receive a new infusion of cash (Bangkok Post, Oct. 30), that's all. And so will others ...

How much is lost is a big question mark.
The so-called Post Audit Committee has been doing some calculations and puts the loss at 330 milllion baht (just 10 billion $US!) or nearly 60% of what was paid in by the government (Nation, Nov. 6).

Bailouts if not coming from the financial sector have to be seen overseas.
Hope is still pinned on China. More rumours of possible deals in the pipeline. The Bangkok Post (Nov. 21) describes claims of a government to government deal between Thailand and the state enterprise of Heilongjiang. 1.2 million ton apparently sold based on global prices. Probably meaning another heavy write-off. One snag, as I see it, the rice will be partially be used as cheap hand-out to 
'poverty stricken nations'.
Which means that these nations won't buy any rice anymore ... Oh and the deal is ex-warehouse revealing that the Chinese might have some issues with quality. Or lack of ...

It's also noted by the same newspaper, the same day that there are questions to be asked. The above. And:
'Nipon Poapongsakorn, a former president of the Thailand Development Research Institute and now a fellow at the TDRI, also questioned the validity and viability of the contract, noting that China's state state enterprises are allowed to import only half the yearly total, with the balance to be handled by private Chinese firms'.
The best way to get your money back is to sell. This from Reuters (Nov. 13):
'The results of the earlier tenders were disappointing. The government sold just 240,000 tonnes of rice in three tenders in July and August out of the 660,000 tonnes offered and another 53,000 tonnes out of the 300,339 tonnes offered in October.
Buyers would prefer to obtain fresh rice from the current harvest than buy from the stocks, traders said'.
No silver lining.

Others seek to address how much rice is stocked and hanging above the market.

Oryzae.com (Nov. 21) mentions stocks taken by USDA are near to 15 million tonnes, excluding the 2 million recently pledged. 

The Bangkok Post (Nov. 21) has it's own take on the stocks of rice in Thailand:
'The Thai holdings will surge 18% to 14.9 million tonnes in 2013 and 2014, the International Grains Council forecasts.
...
Bad weather that hurt crops in the Philippines as well as in India will provide price support in the near term, said Samarendu Mohanty, senior economist at the International Rice Research Institute, based in Los Banos, the Philippines. Output in India may drop as much as five million tonnes to about 100 million to 105 million tonnes in 2013 and 2014, Mohanty said.
"With these Philippines and India cases, and China importing more, I don't think the price will go down any more," said Mohanty, forecasting a gain of as much as $30 a tonne by the end of March. "The upside is limited by ample supply in the market and stockpiles in Thailand."'
Bigger is better so it seems and no guessing that Thailand wants to become the worlds no. 1 rice exporter.
'Thailand is maintaining its original projection to export seven million tonnes of rice this year and is set to reclaim its previous role as world’s top rice exporter next year, according to the Commerce Ministry'. 
So reports the MCOT English News (Nov. 20).

Away from the serious business (or not?), the Not the Nation (Nov. 20) announces that the rice stacks will be transformed:
'Attempting to counter accusations of economic mismanagement, the government unveiled today a bold proposal to turn all of its unsold rice stocks into a “world-class tourist attraction and sports destination” by creating the world’s largest artificial ski mountain.
At a joint press conference with the Tourism Authority of Thailand, prime minister Yingluck Shinawatra revealed images of the proposed 340-meter high hill, complete with five automated chairlifts and a 200-room ski lodge and hotel at the base'.
!!!


Time for something different?
Well If the government doesn't know what policy to follow, why not ask businessmen themselves? 
Charoen Pokprahand (CP) chairperson Dhanin Chearavanont explains (Bangkok Post, Oct. 27) that the way forward is to cut rice production by a third!
'He suggested the government urge farmers to cut down their rice planting and grow other crops by offering a subsidy of 1,500 baht per rai. Supply would shrink and that should drive up prices'. 
One of the current weaknesses of the rice-pledging is government graft, surely that will not go away with this! Whatsmore, how do you stimulate farmers to not produce rice if data concerning farmers and farms is inadequate?
The same article also reveals that losses can never be as high as some claim as the newly appointed permanent secretary at the Finance Ministry is
 'experienced'. 
That he claims, despite not having seen the figures themself!

The remedy, IMF suggests, is to cut the rice subsidies and distribute the savings in other subsidies? So where does the public confidence erosion stop?
What is the reaction by the Thai government?  Take a hike! Predictable.
  
Bloomberg.com (Nov. 13):
'Thailand said that it will press on with a $21 billion rice-purchase program, spurning a call from the International Monetary Fund to end the loss-making intervention and telling the lender its approach is better'.
A potential idea. Even though rice pledge prices are above market prices, farmers should focus on niche markets. The Bangkok Post (Nov. 12) mentions
'experts' 
suggesting farmers to switch to rice seed production or to higher value rice varieties such as:
'Khao Leum Pua black glutinous rice and Rice Berry, two highly nutritious grains with strong demand'.
Price implications
With stocks increasing in thailand what are the implications for the wider global market?

Malaysian Insider (Oct. 30) notes that export prices for Thai riceare at a 3 year low ... Outlook is for prices to drop further ...

Bloomberg (Nov. 21) has another take on Thailands rice pledging. Not that revealing though. The stocking and non-selling is driving prices down, even though the Philippines may import more.

On the other hand, in a sign of changing market conditions, Thai rice exporters are also moving away from their grumpy stand (Bangkok Post, Nov. 25). Or is the simply no more way down ...?

Varia
Bangkok Post (Nov. 5) notices that the Philippines will have it's first genetically modified rice in 2-3 years. It weighs the pro's and con's but has little to add.

Arsenic and rice. A major news item (Nov. 19) in the past weeks has been a study in Bangladesh which links arsenic in groundwater with higher levels in rice.
'Even small amounts of arsenic, over a long time, can cause cancer of the bladder, kidney, lung or skin, previous research has found'. 
No real solutions other than diversifying palate. Might have some implications for bangladeshi exports. And Cambodia might well have similar problems.

Reeling in non-partizanship. Previously stated here, German official aid is teaming up with private funding from Bayer. signalling hybrid rice as avenue of the near future, opposition to the is wastage of public funds is increasing. CTA (Nov. 28):
'In fact, Oxfam and numerous other NGOs oppose the GFP in its entirety. It "threatens to turn small farmers into mere appendages of the business and agriculture models of agro-business", according to the Environment and Development Forum, a broad alliance including Oxfam, the Friedrich-Ebert Foundation, Brot für die Welt (Bread for the World) and the human rights organisation FIAN'.
Regional news
The Irrawaddy (Oct. 30) has a nice piece on Burma's emerging rice export industry:
'Domestic media reported last week that Burma’s export earnings have already slumped about US$100 million so far in this financial year because of weaker harvests caused by poor weather. But a bigger problem is an export market bloated with better-quality rice than Burmese growers can produce, said Samarendu Mohanty, an economist with the International Rice Research Institute (IRRI)'.
Bloomberg (Nov. 27) also picks up on this story and mentions that Burma wants to export near to 5 million tonnes in a year or 5. There are quite a few problems ahead, but the Burmese are brimming with confidence. What might not help are prices dropping ...

Another country affected by the less than optimal export market for rice is of course Vietnam. Export projections have been revised downward so says Vietnam News (Nov. 11):
'The Vietnam Food Association (VFA) readjusted the rice export target for 2013 from 7.5 million tons to 6.7 million, reflecting four months of decreased exports.
...
Deputy Minister of Industry and Trade Tran Tuan Anh told Vietnam News Agency that the country's low rice export turnover was due to competition from India and Pakistan in the African market.
The two countries' favorable geographical locations made their transport fees more competitive, while difficulties in payment and transport forced Vietnam's exporters to rely mostly on intermediaries, he said'. 
Strange as China is one of the biggest importers ...

On the other side like the Burmese there is another sign of hope for Thailand. Why? The sell-off in Vietnam has finished. Apparently nothing is left! Vietnam.news (Nov. 25): 
'“The rice volume in stock is modest, which may be not enough to fulfill the signed contracts. Meanwhile, the sale on the domestic market goes well,” Tuan [Le Thanh Tung, a senior official of the Ministry of Agriculture and Rural Development (MARD)]said.
“We fear that we may miss the opportunity to export rice to the Philippines, when the country needs more rice to relive the people in the typhoon stricken areas,” he added'.
Big news: The Nation (Nov. 22) reports that Cambodian jasmine rice has been awarded the accolade of world's best rice. For a second year running ...