Thailand Crisis

Datas for exports in march have been published (source BOT). Here is an update of the charts.

First, the view per month.

After a weak february, march has been good at 477 billions THB. But that’s only + 4 % compare to march 2007… Does the machine start to suffer from a lack of steam ?

Then, the view per quarter.

Interesting… Q4 2007 seems to have been the peak. Q1 2008 decreases at 1 372 billions THB, eventhough the comparison year-on-year remains good (+10 % compare to Q1 2007).

Overall, the datas coming from the US, Europe, Japan and China show a slowdown or some weakness of global trade… I think Thailand will feel the impact of it.

What’s going on at the Tourism Authority of Thailand ?

TAT publishes every month detailed figures of tourist arrivals (by nationality and modes of transport), with a lag of 2 months.

I follow those stats since last september (look here).

The last updates, with the datas for december, were released beginning of march.

Since then… no update. Datas for january are still unavailable.

Lazyness ? Problem with Immigration services ?

We want our statistics !

The Bank Of Thailand starts to understand that inflation is a real problem (despites their previous denials), that hits hard poor people. And inflation of costs without inflation of wages… curbs purchasing power… therefore consumption. It’s Economy 101.

“If the government continues to introduce [stimulus] measures and consumer confidence picks up, private consumption can grow without interruption,” said economist Tanawat Ruenbanterng, head of the central bank’s team studying the issue. The measures would help cushion the impact of rising costs through the psychological effect, while the soaring cost of living could worsen fragile private consumption.

The rising cost of living has hit households hard, particularly the 40 per cent with the lowest income.

In the first quarter, political uncertainty, inflation and weak confidence played a crucial role in dampening consumption, particularly for durable goods, which account for 11.2 per cent of private consumption. (Nation)

More, gimme more. The BOT obviously doesn’t really understand the situation. New “stimulus” packages or whatever will… fuel the inflation.

Here we see the fundamental contradiction of the thai authorities : they don’t care about long term. They only want a short term “boost“, that could be profitable on the political level.

Their policy is easy to summarize : Prices do increase ? Let’s give people more money. We’ll see what happen later.

A perfect cas d’ecole of the public transport policy… a perfect exemple of a financial disaster…

The Bangkok Mass Transit Authority is in the rabbit role… in Wonderland.

-The BMTA counts 20 % of the 18 000 buses in Bangkok
-on those 3 500 buses, half are not air conditionned
-only 600 000 passengers per day, on the 2 millions of the commuters using buses per day
-its debt stands at 54 billions THB
-per day, BMTA has 500 millions revenues… and expenditures of 900 millions…
-and the government, of course, refuses to increase fares

Indeed it’s a true disaster, after many years of mismanagement (or even no-management), and only short term policies.

You probably saw their buses on the streets… A total shame… They look like african buses, in the 50’s.

So it’s rather funny to hear now the Transport Ministry talking…

BMTA has been told by the Transport Ministry that it was time the agency ended its dependence on state assistance to keep its business afloat. It has been advised that it overhaul its bus services and charge passengers a new daily flat rate of 30 baht if it wanted to stand on its own feet.

The new fare change would help boost its revenue, said deputy Transport Minister Songsak Thongsri yesterday. But success would largely depend on whether the agency could polish the poor image of city buses, mainly caused by its slipshod concessionaires, and draw a greater number of passengers. (Bangkok Post)

The thai government is totally schizophrenic ! It’s unbelievable.

I would like to remind you what did the Transport Minister… 3 months ago : The new minister “ordered Transport Co and the Bangkok Mass Transit Authority to indefinitely delay bus-fare hikes planned for this month and next. Both state enterprises must resubmit documents on their operating costs.” (read here).

So now he’s talking about “independance” and end of state subsidy ? And a 30 THB fare ? !

It’s Wonderland.

Datas for exports in march have been published (source BOT).

Here is an update of the chart of rice exports.

March set a new record with 1 209 093 metric tons (and 533 millions USD in value) ! That’s a 108 % increase compare to march 2007.

To the people who believe that with rice, Thailand has just entered in a golden area of amazing prosperity (yes I heard that…) … I would like to remind you 2 facts :

-total exports in march reached… 14,76 billions USD…
-the high prices… affect the thai people themselves, in their day to day live, and especially the poor people

Thailand is the first exporter of rice in the world… But unfortunatly, interesting articles about rice are not published by the thai press… but rather by the western medias.

Kamolsak Thongta was working at a garage in northern Thailand when rice prices began to soar. So he quit his job, found a plot of unused land and became a farmer.

“With the price like this, I don’t think this is a risky business,” said Kamolsak, 46. “Rice gives good return.”

That rush to profit from the global rice shortage may cause long-term pain for Thailand and world markets.

Farmers trying to cash in now are depleting water supplies set aside for the dry season, which may curtail yields by as much as 75 percent later this year, said Prasert Gosalvitra, head of the government’s rice department. More intensive farming also may make paddies less productive in the future, knocking Thailand from its spot as the world’s biggest rice exporter, he said.

“It is scary in the long term,” said Apichart Jongskul, secretary general of the national Office of Agricultural Economics. “There are impacts on natural resources like water and soil that should be taken into account.” (Bloomberg)

The datas for the cars and motorcycles market in march have been published (BOT here and there).

Therefore, we can update our chart, per quarter.

First, what about march ? It was a strong month.

-20 845 passengers cars were sold. That’s a whooping +39 % compare to march 2007
-45 262 commercial cars were sold (+10 %)
-151 181 motorcycles (+ 17%)

Now, the view per quarter (click on the chart).

As you can see, we are far from the highs.

What to think about it ? In full crazyness about oil/gasoline prices and inflation… thai people look unconcerned.

Good for them. But I’m wondering if it’s going to last.

You might not be aware of that… but it’s now a weekly (or even daily) recurrence : a military official -or a member of the government- denies “rumors of coup”.

Those “denials” and “rumors” are dutifully reported by the press.

Eventually, it’s totally ridiculous. Can you imagine a “normal” country where every week a top ranking officer or minister feels an urgent need to “deny coup rumors”… ?

That shows, if it was necessary, that the current situation in Thailand is not normal.

Gen Boonsrang Niempradit on Thursday said rumours that top military brass had met with privy council president Gen Prem Tinsulanonda on Wednesday night to discuss a possible coup as “unfounded”.

The Supreme Commander said he was busy welcoming his Indonesia counterpart last night so it was impossible for him to have met with Gen Prem.

He also explained that Air Force Chief and former acting chairman of the Council for National Security Chalit Phukphasuk was also on his way back from Chiang Mai last night so there was no way he could have held talks with Gen Prem. (Bangkok Post)

A perfect “contre-temps”.

Rice gained for a fifth day as the extent of the devastation in Myanmar from a cyclone became clearer with as many as 100,000 people dead, and Malaysia agreed to purchase the grain from Thailand, the world’s biggest exporter. (Bloomberg)

And meanwhile, the thai government starts its “cheap rice” campaign.

The Commerce Ministry will sell 300,000 5kg bags of 5-per-cent white rice at Bt120, undercutting the prevailing market price of Bt150 to Bt160.

Thongthong Chandrangsu, deputy permanent secretary of the Justice Ministry, who was named to head the Commerce Ministry’s body on the cheap-rice campaign, said the selling price would be adjusted later to be more in line with market prices.

Of the first 100,000 bags, 73,000 will be sold in Bangkok, while the remaining 27,000 will be offered in nine provinces.

“The government’s cost is Bt83.34 per bag, but we also need to take into account market prices and the competitiveness of private rice packers,” said Thongthong. (Nation)

First, now they are talking about 1,5 million tons (before, no figures were given). Second, we have now a 20 % discount (minimum), not 15 % like stated before. Eventhough, the price will probably go up.

Third, Thailand consumes around 9,6 millions metric tons of rice… Therefore 1,5 millions tons… cover 2 months of consumption. What will happen when those 300 000 bags will be sold ?

Back to square one : “houston we have a problem”.

Fourth, as stated in the article… what about the “competitiveness of private” rice packers (and retailers) ? ! Indeed, that’s a big question !

That’s the beauty of the vacuity of thai policies : short term only.

Act first, think after. Particularly for the consequences.

UPDATE
“Thailand will export 500 000 tons of rice to Malaysia following information that the neighboring country’s rice stock for consumption will only be sufficient for the coming five days. ” (PRD) Rice shortage in Malaysia…

Another good laugh with thai politicians.

Mr Ittipon Khunpluem (son a of powerful family in the area) won the elections in Pattaya. He’s the new mayor.

This young and brillant top gun has some very bold ideas…

Mr. Ittipon intends to put his vision for a new improved Pattaya into practice by carrying out the following policies: (Pattaya Daily News)

-environmental improvement
-the implementation of an effective water supply for the city and Kho Larn (Coral Island)
-a 12-year free education system
-low-cost housing for low income groups
-a new, improved traffic system
-a tramline transportation system
-flood prevention
-job opportunities to decrease poverty
-the eradication of Pattaya’s red-light venue – Walking Street
-the establishment of a drug-observation and prevention centre
-the encouragement of ecotourism
-the construction of a sports centre
-the establishment of a tourism festival
-the encouragement of world-class entertainment

Indeed, it’s good to laugh.

Chart was missing in my first post about the Consumer Price Index for april.

Here it is.

Now, let’s start a little game : how the CPI will evolve in the coming months ?

The index in april stood at 124,6.

It’s impossible to assume that it could fell in may. A reasonable approach would be to apply the previous monthly hikes (1 point in average). So that would push the index in may at 125,6.

May, june and july 2007 had an index at 117,3.

Therefore, the evolution in % of the CPI year on year, would reach +6,2 % in may.

That’s a minimum.

With the oil crisis, the food crisis, and the fact that the prices of many products and services are about to go up… it’s really a minimum.

A CPI at 7 % in june or july, can’t be discarded.