Odds and ends

Stacking the odds

The big news is that the new Thai regime has started to count the rice. In stock. The Bangkok Post (July 3): 

'Nationwide checking of the government's rice stockpile began on Thursday amid allegations of corruption in the Yingluck Shinawatra administration's rice-pledging scheme, and to allow for planning of future rice management'.

One problem I foresee is that the stockpiling and reporting will take an immense time: time enough to cook the books either way ..... 

 Suits sorting the (rice) scheme out (source).

The Nation (July 5) has some preliminary findings. As expected there was bad rice. More surprising was the fact that they also found 

'disorderly stacking of sacks'. 

Bangkok Post (July 5) gives us a blow by blow account: 

'Disorderly stockpiles, deteriorating quality, inconsistent IDs on sacks and mixed grades of rice are among the problems that have emerged on the third day of the nationwide inspection of state rice stocks'.

A day later the Nation continues with the listing of discrepancies. Unfortunately, there's no reference to what degree this affects the total warehoused stock nor whether the amounts stocked were  as expected.

Well, two days later (July 7) the Nation mentions that in 1 province 90,000 tonnes were 

'missing'. 

But not too revealing. 

The Bangkok Post (July 8) then goes on to reveal that  the 

'woes' 

are spreading! It also holds this sentence: 

'According to criteria set by the inspection team, a police complaint can be made only when more than 5% of rice is missing from stocks, ML Panadda said, adding that a check at one warehouse found about 7% of the rice was unaccounted for'. 

So if you make away with 4.9% you're still in the right with the police, strange.
What's in store for the culprits? Bangkok Post (June 25):

'A court has sentenced rice trading tycoon Apichart "Sia Pliang" Chansakulporn to three years in prison for embezzling state rice in 2007

...

In June 2007, the Commerce Ministry's Department of Foreign Trade authorised President Agri Trading Co to improve 20,000 tonnes of white rice from 5% to 100% quality, before the grain was due to be shipped to Iran. But the company failed to deliver the improved rice to a port where Iran had sent a cargo ship to pick it up.

...

According to the court ruling, the company and the defendant were found to have embezzled 16,400 tonnes of 5% white rice worth 175.4 million baht'.

Murky.

The latest news is that in Phichit nearly 47,000 tonnes is missing (Bangkok Post, July 20)

Handsome

Cambodia's rice export a big task so says the Phnom Penh Post (July 4):

'The pace of Cambodia’s rice exports are expected to slow this year. Unable to maintain the steady rate of previous years, the export volume for the first half of 2014 is much the same as it was this time last year.

At the end of June, milled rice exports had reached 178,000 tonnes for the year, barely above the 176,000 exported for the first six months of 2013.

And with the government’s looming target of 1 million tonnes exported in 2015, the trend suggests it will be a difficult goal for the industry to reach'.

Phnom Penh Post has an article (July 9) based on a report by Oryza:

'Cambodia duty-free rice exports to the European Union have this week come under fresh attack from producers in Italy, who say the beneficial treatment is restricting the potential of Italian rice exports.

An Italian agriculture collective of farmers, which includes representatives from the Italian Association of Rice Industries, will protest in some of Italy’s largest rice-growing areas, according to a July 7 report by rice industry publication Oryza.

The cause of the uproar, says Oryza, is the preferential treatment Cambodia receives under the European Union’s Everything But Arms scheme, which allows tax-free access to EU markets for all states on the UN’s list of least developed countries, which includes Cambodia. Italian rice producers say cheaper Cambodian imports create an unfair playing field for their products.

...

The acting secretary-general of the Cambodia Rice Federation, David Van, responded to the concerns of Italian farmers in an opinion piece published in the Post on Monday.

Van said Cambodian exports had merely replaced those from countries, such as Thailand, that exported less than before. Therefore, he said, market pressure on Italian farmers would have changed little from previous years.

Van said that one of the more popular Cambodian grain varieties – jasmine rice – was grown very little if at all in the EU, thus creating room for exports from the Kingdom to meet demand'.

Cambodia though is not the only country to suffer from knee-jerk reactions, Myanmar is also been targeted (Oryza, 17 July).

Companies based in the more freer world and hence forced to be accountable to the general public are increasingly being targeted for the lack of environment and/or HR standards when operating elsewhere, in Cambodia f.i. Phnom Penh Post notes (July 7) that ties between Australia's ANZ bank and the Phnom Penh Sugar Company have been severed.

The severance comes after an ANZ audit revealed that

'... from 2010 to 2013 the company failed to address 60 per cent of recommendations made by Bangkok-based auditor International Environmental Management, including ones related to worker health and safety'.

But damned if you do, damned if you don't: 

'“As a major financier of the sugar project, which has no doubt profited handsomely from it, ANZ has a duty of care to the people whose land was grabbed and that duty does not go away when it recalls its loan,” David Pred, managing director of Inclusive Development International, said'.

Nonchalance

More rice market news, Thailand believes that production will dip this year, so reports the Nation (July 9). That's due to delayed rains. Note should also be made of lower plantings as subsidies have disappeared. 

There seems to be confusion regarding the measures which India will take to soften domestic inflation. They have announced that they will be using as much as 5 million tonnes of their stockpile to amend the domestic situation. Phnom Penh Post (June 25) notes that

'Cambodia’s rice producers fear that any spillover into the global rice trade may impact local exports'. 

If any impact, it would mean less rice in the international market, thus higher prices, thus more demand & higher prices for Cambodia. No fear.

That's illustrated by the Oryza index of rice prices which has been notched around the 450-475 $US for the past 3 years.

However over at IRRI (July 14), they regard this as foreguard of the next storm:

'On the surface, rice markets remain calm and stable, but underlying market sentiments are rapidly changing because of weather disruptions in many rice-growing nations. The global rice market faces the possibility of a production shortfall in the major rice-growing regions in South and Southeast Asia and also in China because of El Niño events. So far, the market has been quite nonchalant about this possibility because of large buffer stocks in key rice-growing countries. Global rice stocks, at least on paper, have increased by 36−80 million tons since the rice crisis in 2007 (USDA: 36 million tons; FAO: 80 million tons). However, the majority of these increases in rice stocks have occurred in three countries (India, China, and Thailand) and they have largely been held by the state agencies'.

That is disconcerting. As illustrated above Thailand's state storage programme seems to be less so.

The authors believe the key maybe public policies in India:

'If India remains open for business, the rice market will behave rationally and prices will be determined by fundamental factors. However, if India imposes any export restrictions, particularly quantitative restrictions, then the market might panic'.

Funny, if the reason for impeding storm is the lack of public storage on a global scale, why not advocate this instead of singling out a triggering situation ....

Meanwhile in Lao

As if Laos has no experience in growing rice without any external inputs, the Vientiane Times (July 7) reports that a Chinese company will now produce organic rice in the people's democratic republic: 

'A large Chinese company plans to grow organic rice in Laos for export to markets in China and Europe.

Chief Executive Officer of SEIF Holdings Mr Frederick Tan and his delegation met with Deputy Ministry of Agriculture and Forestry Dr Phouangparisak Pravongviengkham in Vientiane on Friday, where the company detailed its plans to invest between US$300 million to US$1billion in growing rice in Laos.

He informed Dr Phouangparisak the strategy of the venture with the company initially targeting Vientiane and then the two provinces of Borikhamxay and Champassak for its operations.

“Laos is suitable and it's very good for growing organic rice crops as the soil is not contaminated and the air is clean,” Mr Frederick Tan told Deputy Minister Dr Phouangparisak'.