Sign up | Log in



Home  >>  Daily News  >>  ASEAN ANALYSIS


Asean Affairs    26  September  2011

Asean commodity prices cause global waves

By  David Swartzemtruber

AseanAffairs     26  September 2011

Related Stories

September 25,2011

September 22,2011
Rice subsidy plan may cause havoc

September 21,2011
Is your city on the earthquake list?

September 20,2011
Piracy in Asean waters

September 19,2011
Japan’s woes spark Asean move

 September 18,2011

 September 16,2011
Child mortality drops in East Asia-Pacific

 September 15,2011
Xayaburi dam could increase earthquakes

September 14,2011
Myanmar’s Myitsone Dam Project to continue

September 13,2011
Enter the Cambodians


If one asked the proverbial “man on the street” a few questions about the Asean community, such as “Where is it?” or “What are the member states of the Asean?”- you would be lucky to get correct answers, even in Asean countries.

But when the prices of agricultural-based commodities have sudden price increases, then the world does take notice. Asean countries produce most of the global supplies of rice, rubber and palm oil.

Today’s wave-generating commodity is rice-the staple for at least half of the world’s population is yet another example of a domestic policy adopted to win votes that may cause harm to consumers and disrupt the orderly market system.

On July 3, the Pheu Thai party rolled to victory after proposing a number of crowd-pleasing policies that two months later appear to be ill-conceived and poorly thought through.

The “rice mortgage program” is a reincarnation of a similar plan that was initiated by the government of Thaksin Shinawatra, elder brother of current Prime Minister Yingluck Shinawatra.

In October the Thai government will launch the rice mortgage program offering 15,000 baht (US$500) per ton for paddy _ or unhusked _ white rice, and 20,000 ($637) baht per ton for jasmine hom mali rice. These prices are 5,000 baht more than current market prices.

Under the mortgage scheme, rice is pledged as collateral against loans from the state-owned Bank for Agriculture and Agricultural Co-operatives (BAAC). If rice prices exceed the pledging price, a farmer can sell the rice in the market, repay the loan and pocket the difference as profit.

But if market prices are under the pledging price, the BAAC essentially buys the rice, which is then held in government stockpiles and sold at auction to mills and exporters.

What is shaping up is a scenario where the price of rice will rise (it already has preceding the start of the program) and the government will be on the hook to pay the farmers a higher price than the market price. Paying, of course, with funds generated from taxpayers.

This vote-getting program comes at a time when there are deep social divisions in Thailand and the plan clearly will upset the urbanites, who are about 40 percent of the population versus the majority rural folk.

A highly respected former deputy prime minister and finance minister, MR Pridiyathorn Devakula, says the project could be the "most damaging in history." But of course, his party did not win this year’s general election.

Previous Shinawatra administrations have proved to be short-lived due to poorly conceived programs like the rice mortgage. The crystal ball appears increasingly cloudy for Ms. Yingluck and her political allies.



Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below




1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Today's  Stories    26  September  2011 Subsribe Now !
• Asean markets down Subcribe: Asean Affairs Global Magazine
• Militant role in Sunday church bombing Asean Affairs Premium
• Indonesians are top Twitters
Research Reports
on Thailand 2007-2008

•Textiles and Garments Industry

•Coffee industry

•Leather and footwear industry

•Shrimp industry

• New Economic Model has challenges 
• Philippine manufacturing down in August
• Singapore-Russia trade hits high
• New Thai rice program causing global instability 
• Taxpayers could be hit with rice bill pp

Asean Analysis              26  September  2011

Advertise Your Brand
• Asean commodity prices cause global waves Sponsor Our Events

Asean Stock Watch   26  September  2011

• Asean Stock Watch-September 26 p

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent

• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore
• Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline
• Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2020 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand