#  >  > Living And Legal Affairs In Thailand >  >  > Thailand and Asia News >  >  > Business, Finance & Economics in Thailand >  >  Thai inflation wont soar

## Mid

*Thai inflation wont soar as in China, Indonesia, says SCB chief economist*
วันศุกร์ ที่ 11 มี.ค. 2554 

 

*BANGKOK*, March 11  Thailands inflation rate will not soar as  dramatically as those in China and Indonesia because the rate is  calculated based more than 30 per cent on rice and food prices,  according to a leading Bangkok commercial bank economist.

 Sethaput Suthiwart-Narueput, head of the Siam Commercial Bank (SCB)  Economic Intelligence Centre, said the Monetary Policy Committees  decision to raise the benchmark interest rate by 25 basis points from  2.25 per cent to 2.50 per cent on Wednesday lived up to expectations.

 The Bank of Thailand signaled clearly it wanted to turn the actual  interest rate, which is negative at present, to move in a positive  territory.

 Dr Sethaput believed the policy interest rate would continue rising by  0.25 per cent each time because an interest rate rise by 50 basis points  would make the baht strengthen too rapidly.

 He said the baht had not appreciated sharply at present,  so it is a  proper time now for the MPC to raise the interest rate to stem rising  inflation.

 He predicted the inflation rate will stay within a range of 3.5-4 per cent this year.

 Dr Sethaput said although the interest rate had gradually increased, it  would not adversely affect private-sector operating costs.

 What is worrying now is the governments announcement of a policy to  raise the national minimum wage by a further 25 per cent within two  years, which would significantly add to operating costs of  entrepreneurs.

 The measure is seen as a distortion of the market mechanism. Although it  could boost labour wages immediately, it would cause problems in the  long run, he said.

 A further wage increase will push up business costs, which have been  already fueled by higher interest rates and rising energy prices.  Instead of raising the minimum wage, the government should find a way to  increase incomes. It should also allow energy prices to move by market  mechanisms so that the people turn to save on energy consumption, he  said. 

mcot.net

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## Mid

> Thailand’s inflation rate will not soar as dramatically as those in China and Indonesia because the rate is calculated based more than 30 per cent on rice and food prices, according to a leading Bangkok commercial bank economist.


Smoke and mirrors reign supreme ,

our inflation rate is less than yours because we use different indicators  :Roll Eyes (Sarcastic): 

.

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## rickschoppers

Thailand's inflation rate will not be that dramatic since the average Thai can not afford to pay more. Gas will go up, as everywhere, and will probably cause most of the increase in goods. If it is grown locally, it will not increasethat much in price. If it is anything shipped using trucks, trains, planes or ships, the prices will rise. This is one of the main reasons I have chosen to retire in Thailand. The base price of most things can not increase dramatically since the general population can not afford to buy it.
If you live in a western world, it is whatever the traffic will bare.

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## Mid

> The base price of most things can not increase dramatically since the general population can not afford to buy it.


best wishes with that one .

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## Khun Custard

With an election coming up and the scraping of food price controls between manufacturers and the Ministry of Commerce all coinciding at once this, in my opinion, is a recipe for instability

You do not have to look too far to estimate that their are 100's of 1,000 Thais (if not, more than a million) who operate a cash-in-hand economy that scrape out a living working the road side food stalls - these folk will be first and worst effected by price hikes.

I'd guess that overall, 30% of their customers obtain their income from employment that wage / salary increases that are not likely to be linked to CPI or other mechanisms that adjust income to the cost of living. 

No doubt, the government does not obtain any direct tax income from this large portion of the community so they are out of the government's welfare "catch net".

IF the price of food goes up by 10% where is the extra cash going to come from and what will be the retaliation if/when "ends don't meet"????

On the upside, global food price indicators seem to be reaching a cyclic peak and a major correction might be due soon - glad it's not the banks this time!!

If I was up for election "free Singha and Rice" diplomacy would be my first offering to appease the masses   :Smile:

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## socal

Thailand needs to stop soft pegging the Baht to the sinking USD.

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## who

> Thailand needs to stop soft pegging the Baht to the sinking USD.


-     Dear chap, the Baht is sinking AGAINST the USD.  [amongst other currencies]
-

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## socal

> Originally Posted by socal
> 
> 
> Thailand needs to stop soft pegging the Baht to the sinking USD.
> 
> 
> -     Dear chap, the Baht is sinking AGAINST the USD.  [amongst other currencies]
> -


a few days dont make a trend.

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## who

> Originally Posted by who
> 
> 
> 
> 
> 
> 
> 
>  Originally Posted by socal
> ...


 
-     It has been sinking for the last 15 years.  That would seem to make a trend.
-

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## Butterfly

inflation is going to be massive here, we might see a return to the 35 THB according to the PPP

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## Rural Surin

> Originally Posted by rickschoppers
> 
> The base price of most things can not increase dramatically since the general population can not afford to buy it.
> 
> 
> best wishes with that one .


Perhaps it is wishful thinking. The affordability of goods, here and there, amongst the general population might have some credibility and merit against the basic premise of supply and demand. Whatever the market can bear. The reality of price hikes and general inflationary measures will surely be reflected in the average wages - naturally, which have never kept up with the everyday cost of living. The universal mirror worldwide.

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## crippen

Water in our village has just gone up by 40%! :mid:

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## rickschoppers

> Water in our village has just gone up by 40%!


Dig a well........

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## Rural Surin

> Water in our village has just gone up by 40%!


Every situation, and lifestyles, will differ naturally - as it is true that water and electric have risen slightly over a few years. Water. This hardship would depend on whether the particular households find themselves beholden to the "system" or see to themselves upon storaged water.....which is still very common in rural communities.

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## chitown

> inflation is going to be massive here, we might see a return to the 35 THB according to the PPP


Would better at 40 baht to the dollar. Easier to calculate for one!! 

But also for Thai exporters, tourism etc

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## Butterfly

^ wouldn't solve anything for us actually as prices would soar, so it would be like having the THB at 30 or even less

we are in a reverse J curve  :Razz:

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## socal

> Originally Posted by socal
> 
> 
> 
> 
> 
> 
> 
>  Originally Posted by who
> ...


You have that backwards. It has been rising, not falling. 

January 1998 52.9825 THB   (20 days average)

January 2003 42.7733 THB   (21 days average)

Now its around 30.

It costs less baht to buy a US dollar, since commodities are all priced in US dollars, Thailand has felt less inflation then the US.

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## socal

> inflation is going to be massive here, we might see a return to the 35 THB according to the PPP


July 2010 32.3213 THB   

January 2011 30.5888 THB   

    * Oil is at $89 a barrel, up 21% in the last year.
    * Gold is trading at $1,413, up 23% in the last year.
    * Silver is trading at $30, up 66% in the last year.
    * Copper is trading at 4 per pound, up 26% in the last year.
    * Corn is trading at 573 a bushel, up 49% in the last year.
    * Soybeans are trading at 1,300 a bushel, up 23% in the last year.
    * Wheat is trading at 779 a bushel, up 41% in the last year.
    * Pork is trading at 104 a pound, up 23% in the last year.
    * Beef is trading at 106 a pound, up 28% in the last year.
    * Cotton is trading at 130 per pound, up 78% in the last year.
    * Sugar is trading at 29 per pound, up 32% in the last year.
    * Coffee is trading at 205 per pound, up 40% in the last year.

Since the Baht has gained value against the dollar in the last year, Thailand has actually felt less inflation then the US.

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## Butterfly

> Since the Baht has gained value against the dollar in the last year, Thailand has actually felt less inflation then the US.


idiotic, the stronger THB might have slow down inflation, but their inflation is higher than the US, you dummy.

Gee, you really have no clue  :Smile:

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## socal

> Originally Posted by socal
> 
> Since the Baht has gained value against the dollar in the last year, Thailand has actually felt less inflation then the US.
> 
> 
> idiotic, the stronger THB might have slow down inflation, but their inflation is higher than the US, you dummy.
> 
> Gee, you really have no clue


I know there is more to it but...

Import price numbers just came in for the US. Annualized, its up around 7% :mid:

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## mikediver

Expect the price of rice to go through the roof. The number one rice exporting nation in the world is Thailand. The number two nation is the US. The USDA has published a sharp decrease in acreage will be planted in rice this year. The price of corn is so high due to mandatory ethanol requirements in a gallon of gas (petrol, to any Brits out there) going up that it is not economical to put in a rice crop. If Thailand does not artificially restrict the export of rice the world market price will cause rice to rise sharply in the kingdom. If they do restrict exports a significant source of foreign exchange will be lost. Either way the LOS economy will be affected.

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## madjbs

Since 50% of the population is involved in agriculture, the majority being rice production, restricting exports of rice and keeping the domestic price low would hurt the farmers severely, when they are exactly the group of people who the government need to help and the people who would benefit from a high world rice price.

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## DroversDog

> Since 50% of the population is involved in agriculture, the majority being rice production, restricting exports of rice and keeping the domestic price low would hurt the farmers severely, when they are exactly the group of people who the government need to help and the people who would benefit from a high world rice price.


As long as people in Bangkok get cheap rice then democrat party do not give a flying toss what the farmers get (They will never vote for them!). :Sorry1:

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## Thormaturge

Rice forms 30% of the Thai inflation index, so you can bet it will continue to be subsidised to keep the official inflation rate low while the real rate is rising.  The question surely has to be, what would the farmers buy with their additional money if the price were allowed to rise?.... You can't eat a Mercedes Benz and a high internal rice price would create a transfer of wealth from the rich to the poor.  You won't see an Etonian doing that.

Keep the price low, at least internally, sell the surplus at world prices, and fiddle the infllation figures so you maintain inward investment from gullible overseas investors who think Thai statistics mean something.

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## madjbs

In order the for the farmers to really benefit however, the whole structure of the market would need to change. Currently only the middlemen and exporters would benefit from a high price of rice, the farmers would see little increase in return as the market is not controlled by them, but by the middle men. So, a high price of rice is not sufficient in itself, the market structure needs adjusting too.

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## Mid

_Domestic inflation last month rose 3.14 per cent  year-on-year and 0.49 per cent month-on-month, to 110.49 points, on  rising food and oil prices, commerce permanent secretary Yanyong  Phuangrach said on Friday._

_Mr Yanyong said unstable weather conditions had resulted in rising  prices of most farm-based products, including fresh vegetables.

March  core inflation, which excludes goods prone to volatile price movement,  stood at 104.83 points, up 0.28 per cent from February and 1.62 per cent  year-on-year.

Inflation in the first quarter of 2011 rose 3.01  per cent year-on-year, while the core inflation was 1.46 per cent higher  from the same period of last year, he said._


Bangkok Post : March inflation up 3.14%

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## Butterfly

you can triple that number to make it more realistic

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## rickschoppers

> you can triple that number to make it more realistic


Why do you think it needs to be tripled? Any accurate data?

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## StrontiumDog

*Bangkok Post : Beating the inflation blues
*
*Beating the inflation blues*

*Prices keep rising, prompting many  people to change their spending habits.* 
Published:  4/04/2011 at 12:00 AMNewspaper section: Business
 Many people have no clue what inflation really  means. But while they may not know how core inflation or the consumer  price index is calculated, they do know that today they must pay 10 baht  extra for the same bowl of noodles at the same food stall they always  visit for lunch. A glass of iced drinking water now costs three baht  whereas it used to be only one baht.

 
With everything going up except the money in our pockets, many of us have become reluctant experts on how to stretch a baht.

 And that is how they learn about inflation.*Keep a lid on*: Tips on curbing your expenses*Guest column*: Taming inflation about to get harderBasically, inflation entails rising prices of goods and services,  resulting in declining purchasing power on your part. That means you  will need more money to buy the same bowl of noodles _ and that is an  erosion of your wealth.

 Unlike the stock market, inflation never seems to go down so it is  necessary for you to understand inflation and learn to cope with it  wisely.

 In the past, you may not have made much effort to figure out how to  beat rising inflation, as putting money in the bank seemed to deliver  adequate yields _ as high as 10% way back in the boom years of the early  1990s.

 However, that is no longer the case. The current savings rate of only  1% or less is not enough to beat inflation, and this has started giving  rise to changes in spending habits and even lifestyles.

 Siriporn Boonyanant, 43, a clothing seller on Silom Road, shared her  cost management techniques with the Bangkok Post. For example, she has  cut down on visits to hypermarkets and now shops at fresh markets  instead.

 "It's cheaper, and I can always bargain," she says with a smile.

 However, Ms Siriporn still visits hypermarkets for items marked down at closing time or otherwise on sale.

 Kittikorn Rakkiatcharoen, 28, an employee at a private company, used  to drive to work every day. But these days, the rising price of petrol  has prompted him to to leave his car at home.

 Mr Kittikorn feels mass transport such as the SkyTrain is a more  practical choice in light of the situation. Now he drives only on  weekends when the roads are not so packed with cars.

 Benjamart Lertpaiboon, 30, an officer at another private company,  says she has cut back on department store visits to save on transport  costs.

 She used to go to a department store whenever she felt like it but  now writes out a list of everything she will need for the next month and  buys the items all at once during a single trip. Buying in bulk means  paying less per unit.

 "I know prices are going to keep rising, and buying in bulk and  stocking up helps me to save money," she says, adding that she also  normally pays with a credit card to take advantage of promotional  discounts.

 Sukanya Boonchuaylur, 37, a small business operator, says she is  thinking of refinancing her mortgage, as the lending rate keeps  increasing. "I've never given debt refinancing a thought, as my mortgage  rate was fixed. But after the rate was floated and the minimum lending  rate rose to 6.6%, I started giving it some serious thought."

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## SteveCM

*Bangkok Post : Soybean oil, milk prices up*

         Business          >         Economics          Published:  5/04/2011 at 03:14 PMOnline news: Local NewsThe Commerce Ministry has allowed manufacturers  to lift the price of the one-litre-bottle of soybean cooking oil from 46  baht to 55 baht, Internal Trade Department director-general Watcharee  Wimuktayon said on Tuesday.

 Mrs Watcharee said the nine-baht increase will be effective tomorrow  and the ministry will revise the price again in the next three months.

She  said the ministry had also approved an increase in the price of  pasteurised and UHT milk by about 25 satang to 8.50 baht due to the  rising price of raw milk, effective today.



As a result, the price of 110 to 200cc milk is raised by 0.25 baht,  while the price of two to five litre containers rises by from 3.50 to  8.00 baht.

Thai Frozen Foods Association president Panisuan  Chamnanvej said heavy flooding has destroyed shrimp farms and equipment  in the southern region, with the loss of export revenue estimated at  five billion baht.

The association previously forecast that  shrimp exports would total 360,000 tonnes this year, but that could drop  by about 50,000 tonnes due to the southern disaster, Mr Panisuan said.

He said this year's export revenue would likely be reduced to 99 billion baht, down by five billion baht.

However,  producers in the South could recover quickly, depending on individual  farmer's ability to adapt to the changes, she said.

Approximately 70 per cent of shrimp farms in Thailand are in the South, and the rest in the eastern and central regions.

The country produces about 600,000 tonnes of shrimps annually.

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## SteveCM

*Bangkok Post : Diesel subsidy raised again*

         News          >         Local News       Published:  7/04/2011 at 05:10 PMOnline news: EconomicsThe government on Thursday again raised the  diesel subsidy, by 50 satang per litre, effective tomorrow, to keep the  pump price below 30 baht per litre.



The decision came from a National Energy Policy Committee meeting  this afternoon, after Dubai crude yesteday went up by US$1.68 per barrel  to $115.14 per barrel.

The state Oil Fund subsidy is now 5.90 baht a litre. The excise tax on diesel is 5.30 baht a litre. 

The subsidy is now costing the fund 375 million baht per day, increasing from 10.43 billion baht to 11.27 billion baht a month.

This was the second increase in a week after the committee on Monday, April 4, increased the subsidy by 30 satang per litre.

The  Energy Ministry expected that 10-billion-baht cash on hand in the fund  would be enough for this until the end of this month. After the fund  runs out the National Energy Policy Committee will discuss other sources  of funds if the global oil prices remain high.

Internal Trade  Department director-general Watcharee Wimuktayon said prices for urea  based fertiliser will tomorrow go up by 10 to 35 per cent.

Mrs Watcharee said the increase is in line with the rising prices of raw materials.

The new approved retail prices for urea fertiliser are as follows:

Fertiliser 46-0-0 (the nitrogen, oxygen potassium ratio) will be 725 to 765 baht per sack, up by 24 to 30 per cent.

5-15-15 will be 838 to 870 baht per sack, up by 14 to 18 per cent.

16-20-0 will be 672 to 746 baht per sack, up by 10 to 22 per cent.

21-0-0 will be 411 to 454 baht per sack, up by 23 to 35 per cent.

Farmers  report they have been unable to buy fertiliser ahead of the approaching  planting season, with retailers insisting they have no stocks following  earlier reports the price would increase substantially.  

This has raised suspicions of hoarding.



The University of the Thai Chamber of Commerce's Economic and  Business Forecasting Centre said consumer confidence index (CCI) on the  Thai economy for March went down to 71.0 from 72.2 in the previous  month.

The confidence index on job opportunity for the month stood at 71.6 and on future income was 96.6.

The  centre attributed the decline in all three confidence indices for two  straight months to peoples concerns over the earthquake and tsunami in  Japan, which could have an impact on the Thailands exports and tourism,  and the worry that southern flooding would affect the output of major  crops.

Other negative factors hurting consumer confidence  included the increasing domestic retail prices of fuel,  higher prices  of consumer goods, the fragile global economic recovery as a result of  political violence in the Middle East and North Africa, the centre said.

Positive  figures were the increasing purchasing power of farmers boosted by  higher prices of agricultural products, the governments policy to keep  the diesel price below 30 baht a litre and the continuing export  expansion in March, the centre reported.

UTCC lecturer Vachira  Koonthaweethep said the floods in the southern region would likely cut  gross domestic product growth for the year by 0.24 per cent.

The  damage caused by the floods is estimated at 21.75 billion to 26.57  billion baht, and this would trim GDP growth for the second quarter of  the year by between 0.1 and 1 per cent, Mr Vachira said.

The regions agricultural sector suffered most, with damage estimated at 10 billion to 12 billion baht, he said.

"For  example, about 1,500 prawn raising ponds in flooded areas were swamped,  cutting the fresh shrimp supply from the South over the next five  months. Transportation costs are expected to rise 30 per cent as several  highways and local roads were damaged," he said.

The floods in  Surat Thani, Nakhon Si Thammarat and Krabi in particular would severely  hurt the southern regions economic growth as these three provinces  account for 45 per cent of the southern regions GDP.

Small and  Medium Enterprise Promotion Office director Yutthasak Suphasorn said  severe flooding in southern Thailand has affected about 36,500  small-and-medium-sized businesses and caused two billion baht in damage.

The affected SMEs were mostly in the agricultural sector, such as palm, rubber, shrimp and fruit, Mr Yutthasak said.

He  said about 80 per cent of hotel reservations in the flooded southern  provinces had been cancelled, costing the tourism industry about 900  million baht in turnover revenue.

About 10,300 new SMEs registered in the first two months of this year, while 1,767 businesses had closed down, he said.

The gross domestic product of SMEs for this year should expand 4.2 per cent year-on-year, he said.

The  flood disaster began in the eight southern provinces of Nakhon Si  Thammarat, Phatthalung, Surat Thani, Trang, Chumphon, Songkhla, Krabi  and Phangnga in late March.

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## Mid

> The government on Thursday again raised the diesel subsidy, by 50 satang per litre, effective tomorrow, to keep the pump price below 30 baht per litre.




dogsmom.files.wordpress.com

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## SteveCM

*Bangkok Post : Petrol prices up Friday*

         Breakingnews          >                Published:  7/04/2011 at 06:15 PMOnline news: Local NewsThe PTT, Bangchak Petroleum and other oil  traders have announced they will raise pump prices of petrol by 40  satang per litre staring 5am on Friday.

 Fuel prices per litre in Bangkok and nearby provinces will be as  follows: petrol E85 - 22.62 baht; petrol E20 - 34.94 baht; gasohol 95 -  38.34 bah; gasohol 91 - 35.84 baht; petrol  91 - 43.24 baht.

 Diesel remains at 29.99 baht a litre because of the government subsidy.

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## SteveCM

*Bangkok Post : Economists fear fertiliser shortage may be next blow*

         News          >         Politics       
                               PRICES & POLITICSPublished:  9/04/2011 at 12:00 AMNewspaper section: BusinessThe government's latest move to cap the price of  fertiliser could lead to a domestic supply shortage, economists warned  yesterday.

 The country could see a repeat of the problems experienced with palm  oil, when price caps deterred companies from producing cooking oil  because their raw material costs were soaring, said Praipol Khumsap, an  economics lecturer at Thammasat University.

 "We would prefer to see fertiliser be available, although the price may be higher," he said.

 Commerce Minister Porntiva Nakasai overturned her staff at the  Internal Trade Department, vetoing price increases of 10-35%, which  would have taken effect on Thursday.

 Oil is a key component in fertiliser and its price has been climbing.

 Patamawadee Suzuki, an economics professor at Thammasat University,  attributed the domestic shortage of palm oil in mid-March to the  government's mishandling of stocks.

 The domestic price cap on palm oil resulted in a marked increase in  palm oil exports. Then stockpiling happened even as the government  raised the price cap to 47 from 38 baht.

 Imports were delayed, further straining a supply chain that was still recovering from flooding late last year.

 "We recommend improving all related information regarding stock  management of farm goods such as yields, exports, imports and prices.  We've found this information is mostly in the hands of the private  sector, which has been more proactive in collecting it from growers,"  said Assoc Prof Patamawadee.

 She said that continuing price controls on fertiliser could also lead  producers to reduce its quality. A better solution would be for the  government to communicate with farmers directly to explain why it needs  to raise the price and the consequences if it caps prices.

 "It's time that society accepts the cost of living is more expensive," she said.

 She added the government should instead consider limiting exports to keep domestic supplies adequate.

 The two academics feel the government should abandon its price caps  on food and energy, which have led to supply shortages and low energy  efficiency.

 Assoc Prof Praipol, who is a member of the central bank's Monetary  Policy Committee, said the government should make it a priority to  reduce subsidies on cooking gas, which is increasingly being used in  cars and by industry because retail prices are three times lower than  the market price of regular natural gas.

 The subsidies for LPG resulted in its consumption increasing by 7-8%  per year, compared with flat growth in benzene and a doubling of NGV.  Oil prices are likely to remain high and possibly rise further over the  next six months in light of political tension in producing countries.

 The subsidies for diesel, LPG and NGV led to high differentials for  the retail price of each fuel. The distortion resulted in consumers  switching to cheaper alternatives.

 In the immediate term, reducing the tax on oil that stands at around  25% is a viable alternative to increasing the price, if the government  wants to limit Oil Fund subsidies it may need to borrow to meet  liabilities, said Assoc Prof Praipol.


Writer: Parista Yuthamanop
Position: Writer

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## SteveCM

^ 
This has the potential to get seriously nasty. Obviously enough, agriculture is the biggie. Equally obviously, Porntiva's vetoing of the price increase looks to be motivated solely by one political consideration -  the impact that 10-35% increases would have in BJT's rural base in the promised election. OK - she's unlikely to have done it without Abhisit's nod, so add to that the Democrat's worries about the impact on _their_ own bases outside of BKK.

The simple calculation is that it's politically better to invite crippling shortages _later_ (i.e. after an election) rather than accept the inevitable electoral pain of price increases _now_.

An alternative might be to see use of a diesel-style fertiliser subsidy but that's enormous (as well as massively market-distorting) - and the cash just isn't there for it. All figures already point to the oil fund running on empty before the election - it's just a debate about how long before. This government has poured so much cash (including much that's borrowed) into its vote-winning - i.e. vote-_buying_ - tactics that there's now effectively no room for manoeuvre.

No, not unique in the history of Thai (or other) governments - but they're the ones doing it now. No wonder Abhisit is lining up the election to happen before things get even worse.

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## SteveCM

*Academics call for lower energy subsidies*

BUSINESS »

                            By The Nation
                                             Published on April 9, 2011                

*The Policy Watch, a group of academics established  to monitor government policies, urged the government to reduce energy  subsidies to avoid market distortion, which they said could soon lead to  goods shortages.*

                              The group estimated that annual subsidies are valued at Bt50 billion, based on global crude oil prices. 

Praiphol  Koomsup, an economics lecturer at Thammasat University, said subsidies  would lead to low adjustments among business operators and individual  consumers. Due to subsidies in liquefied petroleum gas (LPG) in the past  10 years, LPG consumption has risen 7-8 per cent per annum, compared to  the near-zero rate for consumption of diesel and petrol. Natural gas  demand has also risen 100 per cent per annum, since its introduction in  2004.

While subsidies boost demand, they also encourage the "wrong  uses", as LPG is now used to power vehicles and factories. Eventually,  this forces Thailand to import the gas, of which the price is three  times higher than the domestic price.

Praiphol noted that as oil  prices are expected to hit US$140 (Bt4,200) per barrel in the next three  to six months due to many negative factors, further subsidies should be  cut. He admitted that product and goods prices would rise after the cut  and influence inflation, but inflation should not exceed the 5-per-cent  ceiling. 

"The impact of subsidy cuts would be felt on goods  prices and in inflation, but they should be limited and should not push a  too-hard burden on monetary policy. Interest rates have been raised to  tame inflation in the past six months, to ensure economic stability," he  said.

Patamawadee Suzuki, another Thammasat economist, said  subsidies can be cut and other policies - like monetary and fiscal ones  as well as free trade policies - can be undertaken to reduce  inflationary pressures. 

She noted that the government's efforts  in delaying fuel-cost-driven increases in goods prices would lead to  shortages, like the one happening with palm oil. But under free trade  agreements, products could be imported to ease shortages. Foreign  exchange policies can also reduce inflationary pressures. 

She attacked  the government for what she called its lack of pre-emptive action.

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## Mid

*

*ryanericsongcanlas.files.wordpress.com

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## Mid

weblog.sinteur.com

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## SteveCM

The Notion's version of the fertiliser issue - which reveals that the price increase veto was actually _ordered_ by Abhisit.....


*Farmers see fertiliser hoarding* 

BUSINESS »


                            By The Nation
                                             Published on April 9, 2011                

*Farmers in Chiang Mai are predicting hoarding of  chemical fertiliser, claiming retailers will try to grab extra profits  from existing stocks following likely increases in prices.*

                              Samarn Thatthiang, president of the farmers' network in  Mae Kuang Basin in Chiang Mai and Lamphun, said that although the  government eventually slammed the brakes on a price hike, retailers are  holding back supplies in expectation of an eventual increase. "The  Internal Trade Department did a very bad job," he said. "Though it  changed its decision over price hikes, everyone now knows they will  eventually come. Those with inventories will start hoarding, expecting  to make a bigger profit. We now anticipate shortages of 46-0-0 urea  fertiliser formula, as rice growers need the formula ahead of harvest to  ensure fat grains," he said. 

He suggested that to prevent  hoarding, the department should check stocks before approving the price  increase. Otherwise farmers will have to pay more for existing stocks. 

Rice  growers usually nurture their fields with 16-20-0 formula two months  after planting, using 30-40kg per rai. The 46-0-0 formula is used at  15kg per rai when rice starts to yield grains. Both formulas now cost  Bt1,000 per 100-kg bag. 

The Internal Trade Department on Thursday  allowed increases of 10 to 35 per cent in chemical fertiliser prices.  The rises affect four formulae: 46-0-0, 15-15-15, 16-20-0 and 21-0-0. 

However,  on the same day, Prime Minister Abhisit Vejjajiva asked the Commerce  Ministry to delay the decision, as the price hikes would exacerbate the  problems of farmers in many provinces whose farm lands had been damaged  by the floods. 

Referring to a discussion with Commerce Minister  Porntiva Nakasai, the premier said the association of rice growers could  cope with the price hike. However, he wanted the Commerce Ministry to  present the Cabinet with a concrete plan to handle the rise. 

"I want the Cabinet to brainstorm what measures we need to mitigate the impact," he said.

The  Commerce Ministry will call a meeting on Monday with relevant  ministries and associations including the Ministry of Agriculture and  Cooperatives, the Fertiliser Traders Association, the Thai Farmers  Association, the Thai Farmers Development Association and the  sub-committee considering fertiliser prices.

Commerce Ministry  permanent secretary Yanyong Phuangrach said yesterday that the meeting  would look at ways to ensure fertiliser supply in light of fears that  the price-rise delay will cause shortages or speculation.

However, traders have reported that the country's fertiliser stockpile is at 400,000 tonnes, enough for one month.

Yanyong  added that the meeting would consider allocating fertiliser quotas to  match crop plantation and area. It will also look at new sources of  fertiliser that could serve farmers' demand for volume and low prices. 

"We  will focus on selling through two channels, including agricultural  co-operatives and the ministry's blue-flag project to distribute cheap  fertiliser to farmers," said Yanyong.

The plan will also try to ensure the survival of small farmers who will need more fertiliser later this month.

----------


## SteveCM

> However, on the same day, Prime Minister Abhisit Vejjajiva asked the Commerce Ministry to delay the decision, as the price hikes would exacerbate the problems of farmers in many provinces whose farm lands had been damaged by the floods.


No prizes for spotting the match between flood areas and Democrat-held constituencies.....  :mid: 





> "I want the Cabinet to brainstorm what measures we need to mitigate the impact," he said.


_"Cabinet"_ and _"brainstorm"_ in the same sentence. Now _there's_ something you don't see every day.....  :Roll Eyes (Sarcastic):

----------


## Warwick

> "Cabinet" and "brainstorm" in the same sentence. Now there's something you don't see every day.....


I take the word 'brainstorm' as a code for 'no one has a f**king clue what to do'.

----------


## SteveCM

*Bangkok Post : Diesel cap may be raised*

         Business          >         Economics       

*Diesel cap may be raised*
*Subsidy has ballooned to 5.90 baht a litre* Published:  8/04/2011 at 12:00 AMNewspaper section: BusinessThe government has ruled out borrowing to cover  increasingly expensive diesel subsidies but hints at raising the price  ceiling for the fuel from 30 baht a litre.

 "The Oil Fund definitely will not seek loans after running out of cash," Energy Minister Wannarat Channukul said yesterday.

 He insisted the fund, which has 11.6 billion baht in cash now, would  be able to subsidise diesel prices until the end of this month.

 "Raising the price ceiling is a viable option," he added.

 More details were not available on how the government might find cash  for the subsidy once the oil fund runs out of money. Mr Wannarat said  the National Energy Policy Committee (NEPC) would have to make the  decision at its meeting on April 27.

 The NEPC has representatives from major economic policy planners such  as the ministries of industry, commerce and finance, operators from the  industrial sector and banks.

 Mr Wannarat also did not give details about the size or timing of  increases in the diesel price ceiling. "It's up to the NEPC," he said.

 Yesterday, the NEPC raised the diesel subsidy by another 50 satang to  5.90 baht a litre. The increase will cost the Oil Fund 375.7 million  baht per day, or 11.271 billion a month.

 The subsidy increase would be paid out to private oil retailers who  have increased their diesel prices to 30.49 baht per litre since  Tuesday. The majority state-owned oil companies _ PTT Plc and Bangchak  Petroleum Plc _ still charge 29.99 baht in line with government policy.

 The Energy Ministry has been subsidising diesel since Dec 17 last  year when global oil prices started to rise in the face of political  tensions in North Africa. Total subsidies to date, including the  50-satang increase yesterday, have cost the Oil Fund 19.35 billion baht.

 Thongyu Khongkant, vice-president of the Thai Logistics Services  Providers Federation, said the private sector strongly disagreed with  the government's plan to raise the diesel ceiling.

 Businesses proposed instead that the government revise its energy  price-fixing plan to allow the prices of natural gas for vehicles (NGV)  and liquefied petroleum gas (LPG) for transport and industries to  increase in steps in order to reduce the Oil Fund's burden.

 The government is also being urged to cut the oil excise tax for  three to six months until the political unrest in the Middle East eases.  After that, the excise tax of 5.31 baht per litre could be reinstated,  he said.

 "If political tensions are exacerbated and prolonged, it is possible  for the fund to borrow to fix the diesel price as it did in 2004-05,  when the fund ran up a deficit of 95 billion baht," he said.

 Brent crude for May delivery fell 0.1% to US$122.15 a barrel  yesterday in London. Crude for May delivery in New York was trading at  $108.95 a barrel, up 12 cents.

 Analysts agree Brent may rally further after surpassing a key resistance level at $119. The next resistance is at $149.


Writer: Yuthana Praiwan
Position: Business Reporter

----------


## SteveCM

*Diesel subsidies cannot last, but will the govt appease voters?

*OPINION »

*WATCHDOG* 
*Diesel subsidies cannot last, but will the govt appease voters?*

                            By Nophakhun Limsamarnphun 
nophakhun[at]nationgroup.com
                                             Published on April 9, 2011                

*Thailand's Oil Fund, the state mechanism set up to  stabilise retail oil prices, is running out of money because of its  subsidising of the diesel price since December.*

                              The government said the fund still has a positive cash  flow of Bt11.8 billion, even though its net position is much less at  around Bt2 billion left.

Last December, Prime Minister Abhisit  Vejjajiva announced a cap on the retail price of diesel below Bt30 per  litre to avoid burdening the poor with a higher cost of living and  stoking inflation, as diesel is widely used in transportation and  manufacturing.

Then, crude oil prices were forecast to be in the  range of $80-90 per barrel. Now, it's in the $110 range, making it more  costly for the government to subsidise diesel. The subsidy is currently  as high as Bt5.9, meaning the price will go up to nearly Bt36 per litre  if it is no longer subsidised.

In hindsight, it was a big gamble  for the premier, who was previously against distortion of market  mechanisms while he was opposition leader. He later argued that the  subsidy was necessary, even though it is now costing the government more  than Bt300 million per day. That's more than Bt9 billion per month.

Based  on the current cash flow and prevailing crude prices, the Oil Fund can  only hold on for another month. Afterwards, the government has two  choices. One is to borrow money to continue the policy. The other is to  let the price go up in accordance with market prices in a gradual  manner. A series of price increases over a number of months will allow  the public to adjust to the new reality.

The Bank of Thailand has  estimated that inflation will rise 0.5-1 per cent if oil subsidies are  removed. That will be the price that the country has to pay, because  it's a net oil importer. Oil subsidies are generally risky, especially  when used for an extended period. Subsidies also distort the energy  consumption pattern in favour of diesel vehicles, many of which are used  as private vehicles, not for public transport. In other words, users of  gasoline and other fuels are indirectly subsidising diesel consumers.

In  response to rising crude prices, the energy policy adminsitration  committee last Thursday granted approval for an additional subsidy of  Bt0.50 per litre so the retail price could be capped at Bt30 per litre.

In  terms of interest rates, the Bank of Thailand will likely raise the  policy rate to 3.5 per cent from the current 2.5 per cent, instead of 3  per cent as previously forecast, because of the likely end of oil  subsidies. This could mean four interest hikes of 25 basis points each  toward the end of this year.

For investors, a subsidy removal is  another risk to the country's economic growth, especially in the second  half of this year. Given that the market price and subsidised diesel  price are now about 15 per cent different, inflation in the third  quarter could rise by 0.6-1 per cent, bringing the whole-year inflation  to 4.7 per cent.

At this stage, the Energy Ministry says it will  not resort to borrowing money to continue the diesel subsidy after the  end of this month. The Finance Ministry has also refused to cut the  excise tax rate on diesel, reasoning that such a cut will cause a  long-term negative impact on the tax system.

Meantime, PM Abhisit  announced he would dissolve the House of Representatives by the first  week of May for a general election in June or early July. After all, an  oil price hike would be very unpopular, especially ahead of the polls. 

That would definitely hurt the ruling Democrats and their chance of re-election.

----------


## SteveCM

> In hindsight, it was a big gamble for the premier, who was previously against distortion of market mechanisms while he was opposition leader. He later argued that the subsidy was necessary, even though it is now costing the government more than Bt300 million per day. That's more than Bt9 billion per month.  Based on the current cash flow and prevailing crude prices, the Oil Fund can only hold on for another month. Afterwards, the government has two choices. One is to borrow money to continue the policy. The other is to let the price go up in accordance with market prices in a gradual manner. A series of price increases over a number of months will allow the public to adjust to the new reality.


Needless to say, this is far from being the only somersault Abhisit has performed since switching from opposition..... Still, that's par for the course with such things - and not just in Thailand.

Bt9+ billion per month is _jaw-dropping_ - and looks set to either stay at that level or move even higher..... crude prices show no sign of falling anytime soon.

As to borrowing - interesting to see what manoeuvres happen around this. As I recall, Abhisit & Co's legal borrowing room is already maxed out and with little parliamentary time left to legislate to increase it. Assuming the available subsidy cash runs out by mid-May, that could mean the beginning of price increases in the 1-2 months before the (promised) election. I suspect the Dems are more than a little concerned.....

----------


## socal

> Originally Posted by SteveCM
> 
> In hindsight, it was a big gamble for the premier, who was previously against distortion of market mechanisms while he was opposition leader. He later argued that the subsidy was necessary, even though it is now costing the government more than Bt300 million per day. That's more than Bt9 billion per month.  Based on the current cash flow and prevailing crude prices, the Oil Fund can only hold on for another month. Afterwards, the government has two choices. One is to borrow money to continue the policy. The other is to let the price go up in accordance with market prices in a gradual manner. A series of price increases over a number of months will allow the public to adjust to the new reality.
> 
> 
> Needless to say, this is far from being the only somersault Abhisit has performed since switching from opposition..... Still, that's par for the course with such things - and not just in Thailand.
> 
> Bt9+ billion per month is _jaw-dropping_ - and looks set to either stay at that level or move even higher..... crude prices show no sign of falling anytime soon.
> 
> As to borrowing - interesting to see what manoeuvres happen around this. As I recall, Abhisit & Co's legal borrowing room is already maxed out and with little parliamentary time left to legislate to increase it. Assuming the available subsidy cash runs out by mid-May, that could mean the beginning of price increases in the 1-2 months before the (promised) election. I suspect the Dems are more than a little concerned.....


They have more then 2 choices. They can completely end the soft peg that the Baht has to the USD, the Baht would rise if not soar. A soaring Baht will bring down prices of all commodities including oil.

----------


## SteveCM

^
Yes - and good luck exporting rice etc with a much higher baht.

----------


## SteveCM

From the blog world.....

*World Bank : Thai Economy Threatened by Inflation | Asian Correspondent*

_By Bangkok Pundit 
Apr 11, 2011 9:00AM UTC


_                                         BP has previously blogged on how inflation and particularly  rising food prices is posing a serious problem for the government and  it will likely be in the back of the minds of voters in the upcoming  election.
VOA:_But World Bank country economist for Thailand, Frederico Gil Sander, says further increases in oil prices threaten recovery and spur inflation._

_Inflation has become a key concern for policy markers both in Thailand  and overseas, noted Sander.  And the concerns about inflation are  clearly related to the recent spike in oil prices.  [And] we should not  expect that oil prices are going to start declining very rapidly even if  the situation in the Middle East is resolved.  So the key message here  is that we probably should not expect oil prices to decline very much   In fact they are likely to remain at relatively high levels._
VOA again noting that it is not just oil prices that are going up:_In Thailand, food vendors say inflation is biting into their daily profit._

_One man says he raised the price of noodles by 16 cents or 5 baht  because fuel, cooking oil, chicken and pork prices have all gone up._

_A banana fritter vendor says he reduced the number of bananas he sells for 32 cents from 20 pieces to 15 pieces._

_What we see is because the economy is doing well, people feel like  they should be able to pass along some of those increases but youll  never be able to pass a 100 percent, noted Frederico Gil Sander, an  economist at the World Bank in Thailand._

_Bad harvests, political tensions and higher demand have wreaked havoc  on many families budgets. Many are getting less for their money._*
BP*: Overall, while the World Bank was fairly buoyant  on the Thai economy, in the short-term it is inflation which is the  problem. While street sellers are able to raise prices in accordance  with the market, many manufacturers/producers of products must obtain  permission from the Ministry of Commerce or their goods are subject to  price controls. With the rise in price of many inputs, these companies  are now being allowed to raise their prices.
_The Nation_ on April 6:_The Commerce Ministry is allowing manufacturers of bottled soybean oil to increase the price by Bt9 per litre from tomorrow._

_Yesterdays approval will bring retail prices of soybean oil up to Bt55 per litre from Bt46.

Meanwhile, the sub-com?mittee has also given the nod to increasing the price of ready-to-drink milk_ _.  The price of 100-200cc cartons of milk will rise by 25 satang;  225-300cc car?tons by 50 satang; and 400-450cc cartons by 75 satang. The  panel agreed to raise the price of ready-to-drink milk follow?ing the  Cabinets approval to boost the price of raw milk by Bt1.50 per litre.  The new price went into effect yesterday._*
BP*: Although, what BP say from a ThaiPBS evening  news show late last week, it was still difficult to find soybean oil in  some places and it was being sold in the mid-60 price range in the black  market. This may change over the coming weeks though.

 Fertiliser prices were then meant to go up 10-35% after the Department of Internal Trade approved increases, but the Minister later overruled these increases. The _Bangkok Post_:_The governments latest move to cap the price of fertiliser could lead to a domestic supply shortage, economists warned yesterday._

_The country could see a repeat of the problems experienced with palm  oil, when price caps deterred companies from producing cooking oil  because their raw material costs were soaring, said Praipol Khumsap, an  economics lecturer at Thammasat University._

_We would prefer to see fertiliser be available, although the price may be higher, he said._

_Commerce Minister Porntiva Nakasai overturned her staff at the  Internal Trade Department, vetoing price increases of 10-35%, which  would have taken effect on Thursday._

_Oil is a key component in fertiliser and its price has been climbing._

_Patamawadee Suzuki, an economics professor at Thammasat University,  attributed the domestic shortage of palm oil in mid-March to the  governments mishandling of stocks._

*BP*: As Patamawadee then notes that continued price controls on fertiliser could also lead producers to reduce its quality. The _Bangkok Post_ again:_A shortage of fertilisers may be unavoidable if  the government insists that importers hold their price for another three  months, say industry executives._

_Companies for the past six months have been losing 2,000 to 3,000 baht a tonne on fertiliser sales  because of a voluntary agreement with the government to cap prices,  said Chumpol Direkwattanachai, sales and marketing director of Yara  (Thailand), the producer of Yara fertiliser._

_His company, with headquarters in Norway, has had to delay imports rather than shoulder higher costs, he said.

If the government delays the price adjustment for another three months,  its certain that there will be shortages, said Mr Chumpol.
_
_Yanyong Phuangrach, the permanent secretary to the Commerce Ministry,  said current stocks of urea fertilisers of around 400,000 tonnes would  help the country delay imports by one to two months._

_However, the ministry cannot hold back a price rise for a long time  because after the floods subside, farmers will want fertilisers for new  cultivation. The ministry will consider the price again as it aims to  ensure the survival of both farmers and fertiliser firms, he said._

*BP*: Will the government allow fertiliser prices to  go up in 1-2 months?  Will there be shortages of fertiliser as some try  to hoard fertiliser? Farmers dont want increased production costs, but  it will be difficult to keep the price down with the cost of inputs  increasing all the time and stocks running low. Not being able to access  fertiliser because of shortages is a more serious problem.

 The rising prices have  pushed inflation up to a 7 month high and lead to a reduction  in consumer confidence for the second straight month. A possible future  problem is diesel is currently being subsidised by the government since  December to ensure it doesnt rise above 30 baht to the litre. The _Bangkok Post_ late last week:_The government on Thursday again raised the diesel  subsidy, by 50 satang per litre, effective tomorrow, to keep the pump  price below 30 baht per litre._

_The decision came from a National Energy Policy Committee meeting  this afternoon, after Dubai crude yesteday went up by US$1.68 per barrel  to $115.14 per barrel._

_The state Oil Fund subsidy is now 5.90 baht a litre. The excise tax on diesel is 5.30 baht a litre._

_The subsidy is now costing the fund 375 million baht per day, increasing from 10.43 billion baht to 11.27 billion baht a month._

_This was the second increase in a week after the committee on Monday, April 4, increased the subsidy by 30 satang per litre._

_The Energy Ministry expected that 10-billion-baht cash on hand in the fund would be enough for this until the end of this month.  After the fund runs out the National Energy Policy Committee will  discuss other sources of funds if the global oil prices remain high_

Now, the government could simply let the Oil Fund go into debt, but  the Finance Minister has been adamant that this will not happen. The _Bangkok Post_:_The government will not subsidise diesel on a permanent  basis and had no intention to drain the state Oil Fund into a huge  deficit to keep it below the actual price. ._

_The diesel subsidy will depend on the amount of money in the Oil Fund._

_We will not let the Oil Fund sink into debt to the tune of 80 billion to 90 billion baht like the past government, Mr Korn said._

*BP*: Actually, there is some creative accounting that  puts the amount left at 10 billion baht, but what will the government  do at the end of April if international oil prices have not gone down?  Let the Oil Fund go into debt say until after the election? Or reduce  the subsidy? Doing the latter will prove difficult just as Abhisit  dissolves parliament.

Pic: AP.

----------


## SteveCM

> it is now costing the government more than Bt300 million per day. That's more than Bt9 billion per month.





> The subsidy is now costing the fund 375 million baht per day, increasing from 10.43 billion baht to 11.27 billion baht a month.


Take your pick..... the second set of figures is certainly "more than" Bt300m/Bt9bn.

----------


## Mid

> Diesel subsidies cannot last, but will the govt appease voters?



istockphoto.com

----------


## The Ghost Of The Moog

I notice that even the cheaper beers in 7-11 seem to be pricier. The de-luxe brands such as Singha and Heineken are for millionaires and show-offs only.

Its a good job I don't barfine, because I wouldn't be able to afford any part of that affluenza-inducing exercise.

----------


## SteveCM

*Bangkok Post : Petrol up by 50 satang Tuesday*

         Breakingnews          >                
Published: 11/04/2011 at 05:08 PMOnline news:PTT and Bang Chak Plc have announced they will  increase the price of all kinds of petrol, except E85, by 50 satang per  litre at 5am on Tuesday.

 The price of E85 will go up 30 satang per litre.

 As a result, benchmark fuel prices per litre in Bangkok and  surrounding provinces will be: petrol 91 - 43.74 baht; gasohol 95 -  38.84 baht; gasohol 91 - 36.34 baht; E20 - 35.44 baht; gasohol E85 -  22.92 baht.

 Diesel remains at 29.99 baht because of the continuing Oil Fund subsidy.

----------


## socal

> ^
> Yes - and good luck exporting rice etc with a much higher baht.




If a weak currency is so great, do you want one too ?

If Thailand pays less for imports then they can industrialize more, they will be able to afford to export less rice. Let a poorer country grow more and export more rice.

----------


## socal

> Originally Posted by SteveCM
> 
> it is now costing the government more than Bt300 million per day. That's more than Bt9 billion per month.
> 
> 
> 
> 
> 
> 
> ...


And the soft peg to the US dollar is a subsidy in itself and you are blind to it.

from Bloomberg

Thailand's Finance minister.

The reaction to the Feds Nov. 3 announcement to buy $600 billion of Treasuries contrasts with that of other nations that say the proposal will result in depreciating the dollar and causing asset-price pressures outside the U.S. Korn also said his nation must accept that its currency must appreciate given its relative economic strength. 

The reality is we need to adjust to a stronger currency, said Korn,

----------


## socal

The baht is the best-performing currency this year in Asia outside Japan, rising 12 percent versus the greenback

 :mid:  :mid: 


> you can triple that number to make it more realistic

----------


## blue

i find it hard to understand
If Thailand has a strong currency , won't there be a tendency to just import stuff from china , rather than home manufacture , also the tourist industry gets hit .

China seems to do well  exporting with a weak currency , while japan in the 80's  did well exporting and had a  very strong currency .
Perhaps what's important is to have full employment and sell stuff the world wants.

----------


## socal

[quote=blue;1729145]i find it hard to understand



> If Thailand has a strong currency , won't there be a tendency to just import stuff from china , rather than home manufacture , also the tourist industry gets hit .


Not necessarily. It depends how little debt the country has and how much productive capacity it has. Germany has higher wages then the US does, yet China has trade deficits with Germany. China also has trade deficits with Japan, yet Japan has higher wages then the US. This should put to rest the bullshit idea that a country needs a weak currency to stay competitive.

It doesn't matter if the tourism industry goes on a decline. With the stronger currency, there will be other more productive things for people to get into.



> China seems to do well  exporting with a weak currency , while japan in the 80's  did well exporting and had a  very strong currency .
> Perhaps what's important is to have full employment and sell stuff the world wants.


Thats right.

The US was the biggest export nation in the world in the 20's and 50's and it had the strongest currency too.

 Capital and the ability to produce things that people want is all that matters. Just think of Germany and Japan. Japan has Toshiba, Sony, Toyota, ect and Germany has Siemens, BMW ect.

----------


## SteveCM

> If a weak currency is so great, do you want one too ?  If Thailand pays less for imports then they can industrialize more, they will be able to afford to export less rice. Let a poorer country grow more and export more rice.


As it happens, I already have one. There are arguments both ways - with the short-term ones for competitive export of agricultural product/raw materials usually favouring weak. As to industrialisation, "can" does not mean "will" - and any significant change in that direction is far, far off in the future. This government is plainly struggling to deal with its understandable main focus - the "now".




> And the soft peg to the US dollar is a subsidy in itself and you are blind to it.


Not blind to it - it has been a constant for some time.

----------


## SteveCM

> Just think of Germany and Japan.


You must be aware what those economies have in common - both benefited from massive post-war capital injection and top-to-bottom renewal of their smashed industrial base with up-to-date technology.




> Capital and the ability to produce things that people want is all that matters.


Largely agree with this - though using "most of" rather than "all". There are a multitude of factors involved in arriving at that happy state - appropriate education to produce the necessary skilled work-force being just one of them.

----------


## SteveCM

> In order the for the farmers to really benefit however, the whole structure of the market would need to change. Currently only the middlemen and exporters would benefit from a high price of rice, the farmers would see little increase in return as the market is not controlled by them, but by the middle men. So, a high price of rice is not sufficient in itself, the market structure needs adjusting too.


*
Thailand's Rice Bowl May Get Smaller as Government Spurs Curbs in Planting - Bloomberg*

                                    By Alan Bjerga and Supunnabul Suwannakij 
Apr 7, 2011


                                        Many Thais revere Me Posop, the rice goddess who guards humankind and rewards good stewards of her grain. Me Posop has been kind to Thailand in recent decades. 

 While its neighbors Vietnam, Myanmar, Cambodia, and Laos struggled through war, Marxist-Leninism, and authoritarian rule, Thailand prospered from its new factories and rice exports. The nation surpassed Myanmar as the worlds top rice shipper in 1965. Last year, 9 million metric tons of Thai rice were exported around the world. 

 Thailand, like the Saudi Arabians in oil, became the key producer, the country that could always moderate global prices with its abundant reserves. This year, while corn and wheat prices have reached new highs, ample stockpiles of Thai rice have driven rice prices down, Bloomberg Businessweek reports in its next issue. 

 Now the Thai government is proposing a change in strategy for its rice growers, who feel pressured by prices, pests and competition from emerging rivals. The government may be ready to abandon Thailands position as the worlds top rice exporter, a serious decision considering the mounting anxiety over the stability of global food supply. 

 Thai farmers are certainly worried about their business. In the rice paddies near Ayutthaya, a former Siamese capital that 17th century emissaries from Louis XIV compared with Paris in its wealth and importance, Payao Ruangpueng must battle an infestation of rice planthoppers that are munching their way through the paddies. 

*Crop Damage* 

 Were suffering from a rice-price slump, crop damage, and lower-than-expected production, she says, standing on the edge of a rain-soaked paddy. Production costs are higher than income. We cant afford to continue planting. 

 The Thai government stated its intention in March to encourage farmers to cut a third planting this year to improve quality and combat the hopper, which dies if deprived of rice plants for 25 days. The plan may eventually reduce annual exports by 2 million tons, or about 20 percent of Thailands shipments. 

 Thai officials say they want the industry to focus on grades of rice that fetch higher prices. While Thai rice shipments have increased 33 percent in the past decade, Vietnamese exports are up 70 percent in the same period to 6 million tons, according to the U.S. Department of Agriculture. 

 Cambodia and Myanmar are also emerging as rice powers, says Pramote Vanichanont, honorary president of the Thai Rice Mills Association and a member of the National Rice Policy Committee. Thailand has priced itself out of much of its own market, he says. Land prices have risen, as well as the cost of tractors and the wages of farmhands. 

*Marketing Hub* 

 The government also plans to turn the country into the warehouse, finance and marketing hub of Southeast Asias rice trade. The Agricultural Futures Exchange of Thailand, the nations government-backed rice and rubber bourse, is starting a new futures contract on April 29 intended to be a regional benchmark for standard quality rice. 

 This strategy may not be good for global food needs. The United Nations expects world food demand to rise 70 percent by 2050, and its Food and Agriculture Organization urged Thailand and its neighbors to grow more rice in February. 

 Reductions in Thailands production may end up hurting poor consumers in Africa and elsewhere while doing little for Thai prices, says Kiattisak Kanlayasirivat, a director at the Thai office of trading company Novel Commodities SA. 

 I doubt whether it is a good policy, as cutting the supply may lead to food shortages, says Kanlayasirivat, whose firm trades about $600 million of rice a year. 
 The Vietnamese may not even have the resources needed to replace cuts in Thai production. 

 I personally think that Vietnam doesnt need to become No. 1 in rice exports, says Nguyen Van Bo, president of the Vietnamese Academy of Agricultural Science. To export a lot, Vietnam will have to exploit a lot of land, use a lot of fertilizers. That could cause degradation of natural resources. 


 To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at  ssuwannakij[at]bloomberg.net; Alan Bjerga in Washington at  abjerga[at]bloomberg.net. 

 To contact the editor responsible for this story: Larry Liebert at  lliebert[at]bloomberg.net; Jim Poole at  jpoole4[at]bloomberg.net.

----------


## SteveCM

*BOT ready to review its monetary policy*

*ECONOMY* 
*BOT ready to review its monetary policy*

                            By The Nation
                                             Published on April 12, 2011                



*Will consider shift from inflation as priority if recovery is at serious risk*

               The Bank of Thailand stands ready to review its monetary stance  if the economy signals a slowdown, as external factors are threats to  both global recovery and the local economy. 

BOT Deputy Governor Atchana Waiquamdee yesterday said an  effective monetary policy needed to take the continuation of economic  recovery into account and not focus solely on interest-rate hikes to  tame inflation, which is now a primary concern for many central banks. 

"Assuming the Thai economy sees no expansion, or nothing happens  to cause stagnation, monetary policy needs to be reviewed," she said.  "However, there is no sign of an economic slowdown in Thailand as yet,  as seen from February's sound economic figures." 

Economists are highlighting the European debt crisis, escalating  violence in North Africa and the Middle East, as well as increasing oil  prices as major risk factors to the global economy.  

Atchana acknowledged that the euro-zone debt crisis might not end quickly.  

The University of the Thai Chamber of Commerce said that although  the Kingdom's export value should expand by 12-16.5 per cent this year,  the growth path could be affected by oil prices and frequent natural  disasters. 

Higher oil prices are pushing up goods prices and overall  inflation. The Bank of Thailand so far this year has raised the policy  interest rate twice, by a combined 50 basis points to 2.5 per cent, in a  bid to tame inflation. More rate hikes could come if growth continues  uninterrupted by internal or external factors. 

There is good news in the appreciation of the baht against the US  dollar. Finance Minister Korn Chatikavanij said this would help soften  Thailand's burden on oil imports as well as delay a hike in production  costs, and hence in goods prices. But for the baht's strength, oil would  have cost more, he said. 

Meanwhile, to maintain the diesel price below Bt30 per litre, the  Energy Policy Administration Committee yesterday approved another  50-satang-per-litre subsidy to Bt6.40.  

Since the policy was implemented on December 17, the Oil Fund's  aggregate subsidy has grown to Bt20.67 billion. The burden is likely to  rise, as oil prices are expected to hit a record US$150 (Bt4,500) per  barrel later this year, from $117 last week, due to supply interruptions  in the Middle East and North Africa.  

BP chief economist Christof Ruehl said in Perth yesterday that it  always took years for disrupted supplies to return to normal after  military conflict and unrest. Following the Gulf War, for example, it  took two years for Kuwait to resume its oil operations. 

Korn said an urgent meeting with Prime Minister Abhisit Vejjajiva  was necessary to find measures to cope with high oil prices, as the Oil  Fund is near to running a deficit. He said there should be a thorough  review to decide whether the oil excise rate of Bt5 per litre should be  reduced.  

The Excise Department estimates that every Bt1 excise cut would shave about Bt20 billion off government revenue. 

The Commerce Ministry is seeking a Bt1-billion budget to finance a  caravan of cheap-goods fairs nationwide, particularly in the 10  flood-stricken provinces. 

Under the Blue Flag scheme, mobile trucks would be dispatched to  the target areas, offering goods priced 20-40 per cent lower than market  levels, said Commerce Minister Porntiva Nakasai. 

She said the three-month project, which could be kicked off after the Songkran festival, should initially cost Bt1 billion.  

The minister added that the premier had approved the project in principle, but more details would be discussed this week.

----------


## SteveCM

*Rising oil prices cast a shadow over world economy: IMF*

BUSINESS »

               By The Nation
                                             Published on April 13, 2011                



*The strain of fuel costs is spreading globally,  depressing growth in advanced economies and pushing up inflation in  high-growth emerging nations.*

                              The International Monetary Fund expects the global oil  price to average US$107 (Bt3,200) a barrel this year and $108 next year,  20 per cent above its previous forecast, due to stronger-than-expected  global petroleum growth in 2010 and a less-than-enthusiastic supply  response. 

The multilateral watchdog predicted last fall that oil  would average $78 this year. After a spike spurred by the political  meltdown in Egypt, it upped that forecast to $89 in January.

According  to the International Energy Agency, global oil demand in 2011 should be  89.4 million barrels a day on average, which is an increase of 1.4  million barrels or 1.6 per cent from last year. 

The IMF said the  global economy, expected to expand 4.5 per cent this year against 5 per  cent last year, is firmly on the mend but faces rising headwinds,  particularly from higher oil prices. 

"The key downside risk to  growth relates to the potential for oil prices to surprise further on  the upside because of supply disruptions," the IMF warned.

Finance  Minister Korn Chatikavanij said on Monday that the diesel subsidy may  expire after this month, as the Oil Fund can no longer bear the burden  after paying out more than Bt20 billion amid the up-trend in global  prices. 

Despite the government's insistence that retail diesel  must be kept below Bt30 per litre, Payungsak Chartsutipol, chairman of  the powerful Federation of Thai Industries, reiterated his wish for the  diesel cap to be lifted. 

Continuing the policy would only  encourage motorists to switch to diesel-fuelled vehicles, increase the  financial pressure on the government and pass more costs to petrol  consumers. 

To end the subsidy, the diesel price should be raised  Bt1 per litre at a time over a six-month period, to allow the public to  adjust, he said. 

Bank of Thailand Governor Prasarn Trairatvorakul  said inflation would accelerate in the second half of this year, and  might rise by 0.5-1 percentage point once the diesel subsidy is removed,  but the factors have been taken into account. 

The central bank's  Monetary Policy Committee is widely expected to raise the policy rate  by 25 basis points at its April 20 meeting. 

Kosit Panpiemras,  executive chairman of Bangkok Bank, urged the monetary authority to  pause the rate hikes, saying they could be made later in the year to  bring the interest rate up to par with 3-per-cent inflation.

----------


## rickschoppers

Yeah, yeah, yeah, spare me all the details on the world economy, just tell me how much my bowl of rice will cost next year in Thailand.
 :mid:

----------


## socal

> Originally Posted by socal
> 
>  If a weak currency is so great, do you want one too ?  If Thailand pays less for imports then they can industrialize more, they will be able to afford to export less rice. Let a poorer country grow more and export more rice.
> 
> 
> As it happens, I already have one. There are arguments both ways - with the short-term ones for competitive export of agricultural product/raw materials usually favouring weak. As to industrialisation, "can" does not mean "will" - and any significant change in that direction is far, far off in the future. This government is plainly struggling to deal with its understandable main focus - the "now".
> 
> 
> 
> ...


i meant that you are blind to the fact that it is a direct subsidy to the US paid by Thailand.

----------


## socal

[quote=SteveCM;1729315]


> Just think of Germany and Japan.





> You must be aware what those economies have in common - both benefited from massive post-war capital injection and top-to-bottom renewal of their smashed industrial base with up-to-date technology.



Thats  bullshit. These countries have capital savings and they are good at producing things people want. 

It makes no difference why anyway. I am just saying that these countries do not need a weak currency to stay competitive. The Euro has been worth more then the USD basically since inception. 

South Korea is anther example.

----------


## socal

> There is good news in the appreciation of the baht against the US   dollar. Finance Minister Korn Chatikavanij said this would help soften   Thailand's burden on oil imports as well as delay a hike in production   costs, and hence in goods prices. But for the baht's strength, oil would   have cost more, he said.


The BOT is one of the few CBs that is welcoming a stronger currency. Common sense is prevailing.

----------


## SteveCM

*Oil tax cut likely as crude prices rise*

BUSINESS »

               By The Nation
                                             Published on April 18, 2011                

*To curb increases in the cost of living, officials  say it is inevitable the government will undertake an oil tax cut as  crude oil prices continue to rise - while the Oil Fund drops to below  Bt10 billion.*

               Prime Minister Abhisit Vejjajiva will chair an urgent  meeting with Finance Minister Korn Chatikavanij and Energy Minister  Wannarat Charnnukul today to discuss the retail prices of fuel. 

Finance  Minister Korn said yesterday the government might cut the oil tax from  Bt5 to Bt3.10 per litre, as the government wants to lessen the public's  cost of living. "The tax rate may be cut to previous rates," he said.

"A  tax cut will be the government's final solution to curb inflation as  the oil fund has now nearly run out," a source at the Finance Ministry  said. 

When former prime minister Samak Sundravej was in office,  an oil tax of Bt3.10 per litre was imposed. However, the tax was  adjusted to Bt5 by Prime Minister Abhisit's administration as the oil  price was quoted at between US$60-70 per barrel. In London, Brent crude  was quoted at US$123.45 per barrel last week. 

Currently the  government provides subsidy to diesel consumers via the Oil Fund,  containing the price at Bt30 per litre. The fund is expected to be  depleted by the end of this month. 

*Life after the oil fund*

Officials at the Excise Department  estimate tax cuts of Bt1 per litre would cause Bt20 billion in revenue  losses. As a result, the government may have to cut down planned  expenditure in order to maintain a small budget deficit. The government  raised the oil tax when crude oil prices were lower, which contributed  to government revenue.

Abhisit yesterday accepted that the Oil  Fund had  nearly run out and the government was unable to further  subsidise the diesel price any longer.

The Oil Fund is reported to be below Bt10 billion now and it can subsidise diesel only through to the end of the month.

"The  meeting will consider ways that will not push up both transportation  and manufacturing costs as we cannot rely on the fund subsidy any  longer," Abhisit stressed, adding that the world oil price is  fluctuating on a rising trend.

Previously, the government adjusted  the excise tax on diesel but now the high curve in inflation is a  greater challenge. He pointed out that the government would focus on a  solution that would not unduly affect the Kingdom's monetary policy and  people's living standards.

----------


## SteveCM

*Oil excise tax waived*

BUSINESS »

*DIESEL PRICES* 
*Oil excise tax waived*


                            By The Nation



*The government plans to waive diesel oil excise tax  of Bt5.30 per litre as well as value-added tax of 40 satang per litre,  to maintain retail diesel prices during May and September below Bt30 per  litre.*

                              The plan would be tabled at the Cabinet's meeting on Wednesday.

  Prime Minister Abhisit Vejjajiva said after the meeting with Finance  Minister Korn Chatikavanij and Energy Ministry Wannarat Charnnukul  today morning that the oil excise tax would be cut as the Oil Fund,  which has been the main tool in maintaining the diesel price since  December 17, is running into a deficit.  

 "The government can't let diesel prices above Bt30 per litre, as  that would affect the cost of living as well as the production cost of  many merchandises and transportation cost. The costs could rise if  retail diesel price exceeds Bt30 per litre," he told reporters.  

 Korn added that the temporary waive in oil excise tax should  shave off the government revenue by about Bt40 billion in the 2011  fiscal year. However, he insisted that this should not affect the  government spending, on expectation that the government would certainly  run a budget surplus this year. 

 Korn was earlier adamant that the oil excise tax would not be cut on fears of the impact on the government spending. 

 Pongpanu Svetarundra, director general of the Excise Department,  pointed out that for every Bt1 drop in oil excise tax, revenue would  fall Bt18 billion per annum, based on the annual consumption of 1.8  million litres. 

 The Oil Fund so far has registered an outflow of over Bt20 billion due to the price subsidy scheme.

----------


## Mid

and once the election is over .................... ::spin::

----------


## SteveCM

> Korn was earlier adamant that the oil excise tax would not be cut on fears of the impact on the government spending.


Would that be "earlier" as in before the election was scheduled? Hmmmm...... pass. Next question, please.

----------


## SteveCM

*Bangkok Post : Diesel taxes set to be dropped*

*Diesel taxes set to be dropped*

*Move to peg pump price will lose the govt B45bn* Published: 19/04/2011 at 12:00 AMNewspaper section: NewsDiesel excise and value-added taxes seem likely  to be dropped from next month if the cabinet today agrees to help the  government cap the pump price at less than 30 baht a litre.

 _Prime Minister Abhisit Vejjajiva, Finance Minister Korn Chatikavanij,  left, and Energy Minister Wannarat Channukul at a press conference  yesterday on the governments move to cap the diesel fuel price. PHOTO COURTESY OF GOVERNMENT HOUSE_ 


 The move comes as the State Oil Fund, the primary tool used by the  government to stabilise energy prices, has seen its finances take a  sharp downturn from the cost of subsidising diesel at 6.40 baht a litre.

 Prime Minister Abhisit Vejjajiva, who chairs the National Energy  Policy Committee, said the committee's decision yesterday to waive the  two taxes for six months would help maintain the solvency of the State  Oil Fund while keeping diesel prices in check.

 Allowing the diesel price to rise would hit consumer goods, transport costs and the overall economy hard, he said.

 Officials estimated that if the policy was adopted by the cabinet it  could cost the government up to 45 billion baht in lost revenues through  to September, assuming crude oil prices stay at current levels.

 Dubai crude oil is currently trading at US$115 (3,345 baht) a barrel,  up 30% from the beginning of the year due to demand from emerging  markets, the weakness of the US dollar and supply worries from political  instability in the Middle East.

 Energy Minister Wannarat Channukul said if government policies did  not change, the State Oil Fund would run out of funds by the end of the  month.

 The fund currently has 34 billion baht in cash, but carries a 29  billion baht debt. Diesel subsidies currently cost the fund 300 million  baht a day.

 Waiving the diesel sales excise tax of 5.71 baht a litre and VAT of  1.8969 baht a litre would allow the State Oil Fund to reduce its subsidy  without affecting the retail pump price.

 Mr Abhisit said pressure on the oil fund should ease further in the  second half of the year once subsidies for liquefied petroleum gas (LPG)  used in the industrial sector are cut.

 Authorities are also encouraging infrastructure investment in natural  gas for vehicles as a cheaper fuel alternative for motorists.

 Business leaders backed the tax cut, saying it was necessary to help ease pressure on prices.

 Federation of Thai Industries chairman Payungsak Chartsutipol said  allowing diesel prices to float based on market forces would result in a  20% price hike for consumers at the pump, which would then have a  ripple effect on inflation and the prices of food and transport.

 But he said while subsidies were likely to be necessary for the next  several months, over the medium term, subsidies should be removed to  help encourage consumers and companies to conserve energy.

 Land Transport Federation of Thailand chairman Yoo Chienyuenyongpone  said most operators currently set rates based on a diesel price of 28  baht a litre.

 "But we're definitely going to see oil prices rise further, possibly  to US$140 per barrel just like in 2008, due to the unrest in the Middle  East and North Africa and speculation in the market," he cautioned.

 Anusorn Sangnimnuan, the president of Bangchak Petroleum, agreed that  policymakers needed to consider the long-term problem of rising energy  prices.

 "If global oil prices continue to rise, how will the government cope?  The State Oil Fund has nearly exhausted its resources," he said.

 Previous governments have also used taxes and State Oil Fund charges  as a tool to manage fuel prices and encourage development of alternative  fuels, such as ethanol.

 Under the Thaksin Shinawatra government, the State Oil Fund ran up a  debt of nearly 100 billion baht subsidising fuel prices in 2004-5.

 Other subsidies paid by the State Oil Fund include 13.50 baht a litre  for E85 gasohol, 4.05 baht a litre for biodiesel and 1.30 baht a litre  for E20 gasohol.

 On the other hand, the fund collects a charge of 7.50 baht a litre on  95 unleaded petrol, 6.70 baht a litre for 91 petrol and 2.40 baht for  95 E10 gasohol.

 Thailand consumes more than 110 million litres of fuel a day, with  diesel accounting for just more than 50 million litres, petrol about 20  million and jet fuel, LPG and other fuels making up the remainder.

 Excise Department director-general Phongpanu Svetarundra said the  government had little option beyond tax cuts if it wanted to meet its  goal of capping pump prices while maintaining solvency for the State Oil  Fund.

 The Excise Department was likely to miss its 2011 target of 425  billion baht in revenue, he said, although the overall impact on the  government's finances would be mitigated by higher-than-expected  revenues from other tax sources.

 Finance Minister Korn Chatikavanij said the tax cuts would have no  impact on the current fiscal budget, considering tax revenues for the  first five months of the 2011 fiscal year have been 132 billion baht  over target.


Writer: Chatrudee Theparat, Yuthana Praiwan and Wichit Chantanusornsiri

----------


## Butterfly

Finance Minister Korn Chatikavanij is quite handsome, he should be the next PM

----------


## SteveCM

*Bangkok Post : Oil tax cut could boost GDP to 5%*

         Breakingnews          >                Published: 20/04/2011 at 11:31 AMOnline news:A reduction of excise tax on diesel would help  boost the 2011 economic growth rate to around four to five per cent,  director-general of the Fiscal Policy Office Naris Chaiyasoot said on  Wednesday.

 In addition, the inflation rate for the year could be kept with the  set framework because the diesel price would still be capped below 30  baht a litre, the director-general said.

 Mr Naris said even though a cut in excise tax on diesel by 5.30 baht a  litre and another 40 satang a litre in value-added-tax would cause a  drop of 45 billion baht in planned government tax revenue this fiscal  year it would not affect the overall expenditure budget outlook.

 He said over the first half of this fiscal year, government revenue  exceeded the set target by 104 billion baht. It was expected revenue  would be even higher in the second half, with projected revenue now  likely to exceed the target by about 200 billion baht.

 After a deduction of 45 billion baht in projected revenue lost due to  the diesel excise tax cut, and another 20 billion baht  allocated to  the local administration organisations, the government would still have  130 billion baht in extra revenue, Mr Naris said.

 Bank of Thailand governor Prasarn Trairatvorakul said the  governments policy to curb the diesel price would help reduce the  general inflation rate by 0.7 per cent and the core inflation rate,  which excludes oil and food prices, by 0.3 per cent.

 The central bank had previously projected the 2011 general inflation rate at 3-5 per cent and 2-3 per cent for  core inflation.

 He suggested the government should send a clear signal that it would  allow the diesel price to move in line with the market mechanism if  global oil prices continue to rise.

----------


## SteveCM

*Bangkok Post : Diesel subsidy sparks concern*

         Business          >         Economics       

                               PRICES & POLITICS 

*Diesel subsidy sparks concern*

*BoT fears rude awakening for public* Published: 20/04/2011 at 12:00 AMNewspaper section: BusinessThe government should make sure the public  understands energy subsidies are only a temporary measure and that  energy prices will inevitably rise, says Prasarn Trairatvorakul, the  governor of the Bank of Thailand.

 "The government can use the subsidies to give producers and consumers  time to adjust," he said yesterday. "But it is important for the  government to send a signal that current prices do not reflect reality  and that people will face higher energy prices once the subsidies end."

 Authorities on Monday agreed to slash the excise tax on diesel from  5.31 baht a litre to only half a satang and to waive municipal tax of  53.1 satang to keep pump prices below 30 baht.

 The tax cut, while having no effect on consumers, will help to  maintain solvency for the state Oil Fund at the expense of lower tax  revenue for the central government.

 The Bank of Thailand estimates the policy will help to ease  inflationary pressure in the short term. Headline inflation could fall  to 0.7 percentage points below existing forecasts in the short term as a  result of the cap.
 Dr Prasarn said core inflation, which excludes volatile energy and  raw food prices, could decline by 0.3 percentage points from original  estimates this year.

 The central bank previously set a forecast of 2.5% to 4.5% for this  year's consumer price index, based on an assumption that the diesel  subsidy would be scrapped.

 "The move [to extend the price cap on diesel until September]  reflects government expectations of higher-than-expected fiscal revenue,  so it will use the surplus as a short-term solution," said Dr  Prasarn."We expect the oil price to continue to increase this year but  decline in 2012."

 Finance Minister Korn Chatikavanij defended the subsidy programme as sound public policy.

 "There is no reason why the government should not intervene to assist  the public and ease the cost of living at a time when government  revenue well exceeds the target," he said.

 The Finance Ministry estimates that for the fiscal 2011 budget ending  Sept 30, revenue will exceed the target by at least 130 billion baht  thanks largely to higher tax revenue from the economic recovery.

 Borrowing to cover the 2011 budget deficit, originally estimated at  420 billion baht, is set to drop to 160 billion, based on the revised  revenue estimates and an assumption that disbursements reach 93% of  budget expenditures, set at 2.07 trillion baht.

 Mr Korn said diesel was a critical production factor in the entire  economy and that capping prices was a key to keeping goods prices under  control.

 "You may ask why we don't just increase diesel prices to, say, 31  baht a litre. It's because increasing diesel prices by just one baht  would be an excuse for producers to raise their prices as well, perhaps  by even more than one baht," he said.

 "The fact is it's hard for prices, after rising, to fall again even if oil prices decline in the future."

 Allowing diesel prices to rise with market forces would lead to pump prices jumping by 20% to 36 baht per litre, said Mr Korn.

 He said that in any case, the long-term solution to higher energy  prices is to improve transport logistics and encourage motorists to  shift to lower cost NGV-powered vehicles.

 Only 12% of transport vehicles now use NGV.

 Mr Korn acknowledged tax breaks distort the market and possibly prompt consumers to use even more diesel.

 "But in the end, we'll see that the benefits [of capping diesel  prices] will outweigh the negatives," he said while agreeing the tax cut  was only a temporary measure to cope with current global oil market.

 Dubai oil prices have jumped by nearly 30% this year to US$114 a  barrel due largely to instability in the Middle East and North Africa.


Writer: Parista Yuthamanop and Wichit Chantanusornsiri

----------


## SteveCM

^



> The government should make sure the public understands energy subsidies are only a temporary measure and that energy prices will inevitably rise, says Prasarn Trairatvorakul, the governor of the Bank of Thailand.  "The government can use the subsidies to give producers and consumers time to adjust," he said yesterday. "But it is important for the government to send a signal that current prices do not reflect reality and that people will face higher energy prices once the subsidies end."



_Before_ the (promised) election? In your dreams, governor.  :23:

----------


## SteveCM

*Bangkok Post : Diesel tax cut to 0.005 baht/litre*

         Breakingnews          >                
Published: 20/04/2011 at 03:18 PMOnline news:The cabinet has agreed to cut the excise tax on  diesel from 5.31 baht a litre to 0.005 baht, as proposed by the Finance  Ministry, Energy Wannarat Channukul said on Wednesday.

The new tax rate will take effect tomorrow, April 21, and be effective until Sept 30, 2011.

The reduction of the excise tax on diesel  was aimed at keeping the pump price below 30 baht a litre, he said.

 Economists have warned that a rise in the price of diesel would have a  flow-on impact because it would increase industry production costs and  transport costs for consumer products.

The government says above-predictions revenue collection this year more than covers the loss of diesel tax revenue

----------


## SteveCM

*Bangkok Post : Petrol prices down 40 satang tomorrow*

         Breakingnews          >                

Published: 20/04/2011 at 05:06 PMOnline news: News
                                 PTT and Bangchak Petroleum outlets will cut the  prices of all  petrol except E85 by 40 satang per litre starting 5am on  Thursday due to the decline in the prices of finished oil products in  the world market.

 The price of gasohol E85 will be reduced by 20 satang per litre.

 As a result, fuel pump prices per litre in Bangkok and nearby  provinces will be as follows: petrol 91 - 43.34 baht; gasohol 95 - 38.44  baht; gasohol 91 - 35.94 baht; gasohol E20 - 35.04 baht; gasohol E85 -  22.72 baht.

 Diesel remains at 29.99 baht.

----------


## SteveCM

^ & ^^

Arguably, both these reports could go equally well into the thread at https://teakdoor.com/thailand-and-asi...sh-coming.html (Govt keeps cash coming)

Yes, they're measures that (at least in the short term) head off unwelcome inflation - but they're also very obviously aimed at the even more short term aim of shoring up this government's wobbly prospects in the (promised) election.

----------


## SteveCM

*Thai-ASEAN News Network*

*Benchmark Rate Raised to 2.75%* 

UPDATE : 20 April 2011                     *

The monetary policy regulator raises the benchmark interest rate to 2.75 percent in a bid to contain soaring inflation.

The Bank Of Thailand, or BOT 's, Monetary Policy Committee today votes  six to one to raise the policy interest rate by 25 basis point to 2.75  percent from 2.5 percent, effective immediately. 

The panel reasoned the increase aimed to ease pressure from the upward spiral of inflation. 
*

BOT Assistant Governor for monetary policy Paiboon Kititsrikangwan   stated the rising inflation has been influenced  by constant growth of  demand which allows operators to pass on their higher costs by raising  product prices. 

Paiboon went on to say inflation will continue to move in the upward  trend as prices of oil and other commodities remain high while prices of  goods under the government's control will begin to increase. 

He then said the country's economy for the first quarter still grows  strongly thanks to the healthy demand in the country and overseas. 

Paiboon said the accelerated growth of the total business loans is in compliance with the economic growth. 

He added the widespread disasters in Japan will cause a slowdown in the  country's industrial production and export of cars and electronic goods.  

Paiboon remarked the capacity of the manufacturing sector will pick up  after the shortage of components imported from Japan eases and hence is  able to meet domestic and international demand. 

He stated the Thai economy will further expand on the back of the  recovery in the United States and the European Union while the impact of  devastating floods in the South is limited.

----------


## Spin

> Finance Minister Korn Chatikavanij is quite handsome, he should be the next PM


Indeed, over the last few years he has shown himself to be foolish, ignorant, shortsighted, and grossly misinformed, so seemingly, he is perfect for the job  :Smile:

----------


## SteveCM

*Thai-ASEAN News Network*

*Vendors Hit Hard by Rising Goods Prices* 

UPDATE : 20 April 2011                     *

Vendors at provicial markets have  complained about rising prices of goods, espceially pork and eggs, badly  affecting their business.

Food vendors at Buri Ram municipal market have asked the government to  address rising prices of goods, particularly eggs and pork. 

They said eggs once sold at 95 to 100 baht per tray but now the price is 110 baht. 
*

Also the price of pork once at 110 to 120 baht per kilogram has increased to 135 to 150 baht. 

The vendors said the increasing prices of raw materials have become  their big burden since they have to shouder higher costs without being  able to raise the prices of their cooked foods.

At Betong municipal market in Yala province, the price of pork is at 160 baht per kilogram, resulting in slower sale. 

Vendors complained that they have to sell pork at a higher price due to price adjustment by the government. 

They want the government to urgently solve the problem.

In Maha Sarakham, pork price has been adjusted to 160 baht per kilogram.  Vendors said they had to adjust the price to rising price from farms.

At Kalasin municipal market, prices of food products ranging from fresh vegetable to meat have also risen.

Kalasin provincial trade officer Siripong Wiwatkasemchai, blamed the  price increase partly on natural disasters that damagec crops. 

He urged vendors to display product prices properly.

Meanwhile, the Internal Trade Department plans to organize a Blue Flag  campaign for cheaper pork and eggs in the near future to help consumers.      

The Internal Trade Office in Chantaburi province has banned egg export  to neighboring countries after the Commerce Ministry announced a ban on  egg export due the shortage in the country.

----------


## SteveCM

^




> Vendors Hit Hard by Rising Goods Prices


Only the vendors?

----------


## SteveCM

*PTT hopes Govts fuel price subsidy will be short-term : National News Bureau of Thailand*

                                                                                                                                                                                                                                                                                               BANGKOK, 21 April 2011  (NNT)  

Energy giant PTT Plc has suggested the Government to refrain  from pegging the prices of diesel and liquefied petroleum gas (LPG) for a  long period of time as it would lead to higher demand and imports. 

PTT President and CEO Prasert Bunsumpun indicated that the global oil  price had been hovering at a high level as a result of the surging  demand and the ongoing unrest in oil producing countries in the Middle  East and North Africa. Therefore, he viewed that the Governments policy  to freeze energy prices, particularly diesel and LPG, by means of  subsidization and tax reduction should not be adopted over the long haul  due to a heavy burden on the country. 

Mr Prasert elaborated that the newly-imposed excise tax cut measure to  keep the diesel price below 30 THB a liter would cost the Government  over 100 billion THB in revenue each year, whereas the amount could  instead be spent on other key areas of national development.  

Further price distortion is also expected to augment the overall power  consumption of the country and even affect the automotive industry as  more motorists would be attracted to the cheaper diesel and LPG. With  the limited domestic production capacity, more imports of both types of  energy would eventually become necessary.                                


Reporter : Surapan Laotharanarit

----------


## SteveCM

All change! What a difference a couple of days make.....




> Bangkok Post : Petrol prices down 40 satang tomorrow  Breakingnews >      Published: 20/04/2011 at 05:06 PM     Online news: News  PTT and Bangchak Petroleum outlets will cut the prices of all petrol except E85 by 40 satang per litre starting 5am on Thursday due to the decline in the prices of finished oil products in the world market.


*Bangkok Post : PTT, Bangchak raise pump prices*

         Breakingnews          >Published: 22/04/2011 at 03:24 PMOnline news:PTT and Bangchak Petroleum announced on Friday  that they are increasing the pump price of petrol and gasohol by 0.40  baht a litre.

 The new prices of fuels will take effect early Saturday morning.

 The price of gasohol E85 remains unchanged, as does the price of diesel.

----------


## nostromo

With high level of Baht, imported goods should be less expensive. But Red Leicester cheese always costs the same in Tops...

I only tank Shell V-Power for strong diesel engine. It is premium price anyways so minor local changes in do not count so much, it is the global price of oil what counts

----------


## Thaihome

> ...I only tank Shell V-Power for strong diesel engine. It is premium price anyways so minor local changes in do not count so much, it is the global price of oil what counts


You do know that Shell is just a retail company Thailand and does not produce the fuels they sell in their outlets, right?  They sold their share (to PTT who now owns 100%) of the Rayong Refinery 6 years ago.

All that V-power stuff is just marketing.  At best, there may be some additives put in, but basically it all the same stuff regardless of brand.
TH

----------


## SteveCM

*Bangkok Post : Bangchak also raises pump prices*

         News          >         Local News       Published: 29/04/2011 at 03:39 PMOnline news: EconomicsBangchak Petroleum announced on Friday afternoon  that it is increasing pump prices by 60 satang a litre for petrol and  gasohol and 30 satang per litre for gasohol E85.

 The new retail prices will take effect from early Saturday morning.

 The new pump prices at Bangchak outlets in Bangkok and nearby  provinces will be 36.94 baht a litre for petrol 91, 39.44 baht for  gasohol 95, 36.04 baht for gasohol E20 and 23.02 baht per litre for  gasohol E85.

 Caltex, Shell and Esso this morning increased pump prices of gasohol by 60 satang per litre. 

Esso also raised the price of petrol 91 by 75 satang a litre.

 The price of diesel is unchanged.

----------


## SteveCM

*Recovery could be squeezed by inflation and speculation*

OPINION »

*WATCHDOG* 

*Recovery could be squeezed by inflation and speculation*


                            By Nophakhun Limsamarnphun 
nophakhun[at]nationgroup.com
                                             Published on April 30, 2011                



*The Bank of Thailand will pursue its interest rate  normalisation policy toward the end of this year, with fourth-quarter  inflation projected to reach the central bank's upper target limit for  price increases.*

               Crude oil has been rising toward the US$110-120 range  per barrel from last year's forecast of $80-90 per barrel. As a result  of this oil-driven inflationary trend, the central bank will raise the  policy rate at least twice more this year from the present 2.75 to 3.25  per cent.

According to its April inflation report, the central  bank forecasts GDP growth of 4.1 per cent for 2011 and 4.2 per cent for  2012.

Meanwhile, the March manufacturing output index dropped 6.67  per cent year-on-year, largely because of the supply chain disruptions  caused by Japan's March 11 natural disasters.

This disruption hit  several Thai industries in which Japanese firms are key players,  especially automobiles, electronics and semiconductors, but the effects  are still expected to be temporary.

Regarding inflation, the  headline figure, which excludes food and energy prices, is projected to  rise to 3.9 per cent, while the more fundamental core inflation is  forecast to average 2.3 per cent this year, with the fourth-quarter  figure possibly topping 3 per cent - the central bank's upper-range  target.

Inflationary pressures have risen due to rising oil and other commodity prices, including precious metals such as gold.

The  central bank earlier estimated that the government's current diesel  price subsidy programme had helped cut inflation by nearly one  percentage point.

From December last year to the middle of April  this year, the government spent more than Bt20 billion in diesel  subsidies as it pledged to cap the retail price below Bt30 per litre.

Another Bt45 billion worth of excise tax cuts are now earmarked to continue the subsidy programme toward the end of September.

Once  subsidies are removed, inflation could spike sharply, so the central  bank is maintaining a close watch on inflation and prefers to continue  its rate normalisation policy rather than taking a pause.

This  stance has drawn criticism from those who argue that economic growth  will be hurt by higher interest rates during this volatile period.

According  to Kasikorn Bank's capital market research unit, the central bank will  likely raise the policy rate to 3.25 per cent by July, with two rate  hikes of 25 basis points each.

On the currency market, the baht  traded at around 29.90 per dollar against the backdrop of the US Federal  Reserve's signal to continue its low interest rate policy of 0-0.25 per  cent after ending the second round of quantitative easing worth $600  billion in June this year.

Given that the US economic recovery is  still fragile, as evidenced by weaknesses in labour and other key  markets, US authorities are not expected to reverse the unprecedented  monetary policy any time soon.

In response, commodities and  precious metals staged rallies, with gold prices setting a new record of  $1,538 per ounce as the dollar's weakness further extended due to the  lack of any signal on monetary policy tightening.

Speculators are  now talking about gold rallying toward the $2,000-per-ounce mark as  investors around the world adjust their portfolios to include more  commodities and precious metals.

In other words, investors are  losing more confidence in paper currencies and other types of financial  assets, especially the US dollar.

----------


## SteveCM

*Bangkok Post : Inflation spikes at 15-month high in April*

         Business          >         Economics       

                               ECONOMY 

*Inflation spikes at 15-month high in April*Published:  3/05/2011 at 12:00 AMNewspaper section: BusinessThe Consumer Price Index in April rose to a  15-month high, up by 4.04% year-on year, with volatile weather pushing  up food and vegetable prices.

 _A schoolgirl picks out shoes at a Klong Toey market on Sunday.  Parents are taking their children to buy new uniforms, bags and  stationery ahead of the new school term that starts later this month.  Most say they buy only what is absolutely necessary, as they feel the  economy is not very good. School-supply budgets seem to be hovering  around 1,000 baht. PHRAKRIT JUNTAWONG_


The index stood at 112.01 points in April, a rise of 3.27% for the  first four months year-on-year, said Yanyong Phuangrach, the permanent  secretary for commerce. The April index rose by 1.38% from March.

 The ministry reported fast-changing and hot weather as well as  flooding caused prices of fresh vegetables to increase by 14.4%, meat  7.2% and ready-to-eat foods 5.6%.

 April's core inflation, which excludes volatile food and fuel prices,  stood at 105.29 points, or 2.07% higher than a year earlier due to  rising rents and construction materials. It increased by 0.73% from  March this year, while the four-month core inflation was 1.62%.

 However, the ministry still maintains a full-year inflation target of  3.2-3.7% by focusing on a price supervision policy for products using  domestic raw materials, as well as pork, eggs, chicken, rice and sugar,  said Mr Yanyong.

 He acknowledged the prices of products with a high percentage of imported raw materials may increase in line with import prices.

 The ministry hopes to increase income through supporting exports, which may grow 20% this year, he added.

 "Average inflation for the second quarter should rise to 3.45% due to  spending prior to the new school term, while farmers must buy materials  for the coming cultivation season," said Mr Yanyong.

 The ministry said the producer price index in April was 139.3 points,  up 6.6% from last year but only 1.4% from March. The four-month PPI  increased by 6.4% year-on-year. This was attributed to rising prices of  rubber, vegetables, livestock products, sugarcane, minerals and fuel.

 Sompop Manarungsan, president of the Panyapiwat Institute of  Technology, was not surprised at how quickly prices were increasing, as  the government implemented measures to manage cost-push inflation. He  said without the measures, last month's inflation may be 5% or more.

 He believes the government should not try to control prices on the  supply side, as it distorts the market and can impact the supply chain.  Such price controls cripple the private sector's ability to increase  wages even as living costs increase.

 Dr Sompop supports the Blue Flag project for cheaper consumer products.

 Commerce Minister Porntiva Nakasai will seek cabinet approval today  for a 200-million-baht programme to implement measures aimed at reducing  living costs over the next three months.

 The ministry yesterday announced its suggested farm-gate price of  pork at 70 baht a kilogramme, up from 64-66 baht, meaning the retail  price would be 140 baht, up from 130. Its suggested price of mixed-grade  eggs dropped by 10 satang each to three baht.


Writer: Phusadee Arunmas
Position: Business Reporter

----------


## SteveCM

From Twitter today:

TAN_Network   TAN News Network                                             

       Electricity price's FT rate hiked by 8.9 satang/unit, effective from May-Aug

1 hour ago

----------


## SteveCM

*MPC fears pent-up pressure from diesel price cap*

BUSINESS »

INFLATION

4 May 2011

                            By The Nation



*While the government expects diesel price cap to  delay price hikes and hence inflation, the Monetary Policy Committee  viewed the policy as a catalyst for inflationary pressure.*

               In the minute of meeting on April 20, the MPC said "The  postponement of the lifting of the diesel price control may lead to an  increase in pent-up price pressure and pose an upside risk to inflation  going forward especially if oil prices rise by more than anticipated  when the control is lifted."

 Supporting its decision to hike the interest rate by 25 basis points  to 2.75 per cent, the MPC said that aside from the control, the pressure  increased due to (1) oil and commodity prices which continued to rise  amid strong economic expansion and (2) the lifting of government price  administration for various goods which facilitates the pass-through from  production costs to goods prices as reflected in rising inflation  expectations. 

Federation of Thai Industries Chairman Payungsak Chartsutipol  said at the joint public/private meeting on Tuesday that the government  should end the diesel price control for a similar reason.  

Under the Abhisit government, the Oil Fund has spent over Bt20  billion to keep diesel price below Bt30 per litre. As the Oil Fund was  depleted, the government lately decided to waive the oil excise tax and  value-added tax, equivalent to Bt5.70 per litre. This will be effective  under September. 

While saying that this should shave off government revenue by  Bt45 billion, Finance Minister Korn Chatikavanij said the next  government would decide again on how to handle the oil prices.  

According to PTT Plc's risk management unit, Dubai crude oil last  week increased US$2.36 per barrel from the previous week to $118.25 per  barrel. Refined petrol and diesel prices rose $5.41 and $0.85,  respectively, to $134.48 and $138.  

Oil prices should remain at a high price this week due to  continued violence in the Middle East and North Africa as well as fears  of counter attacks from terrorists. However, fragile economic condition  in Europe as well as India's measures to cope with overheating may  weaken the prices. 


The following is the MPC minute:  

The meeting was attended by  

Prasarn Trairatvorakul (Chairman and Governor)
Atchana Waiquamdee (Vice Chairman and Deputy Governor, Monetary Stability)
Suchada Kirakul (Deputy Governor, Corporate Support Services), 
Ampon Kittiampon, 
Praipol Koomsup, 
Siri Ganjarerndee, 
Krirk-krai Jirapaet.

The International Economy 

The global economy continued to expand and was expected to maintain its momentum. The Japan crisis and the resulting disruption in the regional supply  network would somewhat affect theAsian economy but leave the overall  global growth momentum intact. The US economic expansion would be driven  by private consumption and production going forward. The gradual  recovery of the euro area economy would continue despite remaining risks  from sovereign debt. Meanwhile, the Asian economy expanded robustly.

Inflation risk clearly increased in many countries amid continued  economic expansion as well as the rise in oil and commodity prices due  to geopolitical developments in the Middle East and natural disaster.  Inflation in the US picked up while actual inflation and inflation  expectations rose visibly in the euro area. In Asia, inflationary  pressure continued to build, leading to further increases in interest  rates across the region. The European Central Bank (ECB) notably raised  its policy rate for the first time since the global financial crisis in  the face of persistent inflationary pressure. Members noted that the ECB  hiked rates in response to oil prices and the risk of second-round  inflation despite remaining economic fragilities. 

 The Domestic Economy 

 The Thai economy expanded well in the first quarter of this year from  both internal and external  demand. The economic impact of the recent  flood was small. Going forward, the growth momentum would be sustained  by the following factors: (1) expanding private consumption supported by  strong farm income; (2) rising private investment due to the need to  expand production capacity as reflected by accelerated corporate credit  growth; (3) government spending; and (4) continued export expansion to  meet demand from both developed and emerging markets as recovery takes  hold. The Japan crisis was expected to result in a temporary supply disruption in certain manufacturing and export sectors. 

 The electronics sector would be able to manage the disruption by  using alternative supply sources. Nonetheless, the automobiles sector  would slow somewhat in the short-run due to its dependence on  technologically advanced parts from Japan before picking up after the  supply disruption is resolved. 
Some members expressed concerns over the severity of the impact of the Japan crisis on the production network, but assessed that it would not weigh on the overall growth momentum of the Thai economy.

 Financial Markets 

Transmission from the policy rate to commercial bank rates continued to be effective. Many commercial banks raised both lending and deposit rates following  the rate hike from the previous MPC meeting (9 March 2011). Regarding  interest rate expectations prior to this meeting, a rise along the short  and medium-term parts of the yield curve showed that the market had  priced in a rate hike. This was consistent with survey results in which  all market participants expected a rate hike of 0.25 percentage points. 

Robust economic growth contributed to increased capital inflows into the equity and bond markets especially in bonds with maturities of less than one  year. Other economies in the region also experienced increased capital  inflows. The baht and other currencies (except the Japanese yen)  appreciated relative to the US dollar as investors sought non-US assets  due to growth differentials and widening interest rate gaps given  expectations that the Federal Reserve would hold its policy rate until  the end of the year. The euro strengthened following the ECB rate hike.  The Japanese yen weakened continuously due to carry trade transactions  following temporary appreciation after the earthquake.

Members emphasised the impact of two recent major events--the  Japan crisis and persistently high oil prices--on the balance of risks  to growth and inflation.

 For six members, mounting inflationary pressure remained the primary risk and continued to warrant a rate hike of 0.25 percentage points. The Japan crisis  posed a downside risk to the Thai economy but its impact was expected to  be temporary. On the risk to inflation, those members viewed that  inflation pressure had become more apparent and remained the key risk as  reflected in rising inflation expectations amid the economic upturn. In  such an environment, pass-through from production costs to goods prices  may intensify and add to inflationary pressure. As a result, rate  normalisation should continue given low real interest rates that  currently prevail. 

Some members noted that exchange-rate appreciation could mitigate  some of the pressure exerted by high global oil and commodity prices on  inflation expectations; however, the effectiveness of the exchange rate  in anchoring inflation expectations was considered to be limited  compared to the interest rate tool. 

For one member, the crisis in Japan called for an interest rate  pause. In light of the risk that the Japan crisis could become more  drawn-out than expected, a rate pause would give the MPC more time to  fully assess the situation. However, going forward, rate normalisation  should be maintained. 

The MPC therefore decided to raise the policy interest rate by  0.25 percentage points, from 2.50 to 2.75 per cent per annum, effective  immediately.

 Members discussed the neutral rate that will mark the end of the  normalisation cycle. The level of the neutral rate varies according to  the economic outlook at each point in time and is thus difficult to pin  down precisely. Nevertheless, current negative real interest rates amid  output gap closure reflect accommodative monetary policy. 

The MPC decided to release the point estimates of both the baseline forecasts for GDP and inflation in the Inflation Report to replace previously published  range estimates. The fan charts remain. These changes have the  following benefits: (1) allow the public to better interpret changes in  the forecasts, particularly in instances where the forecast range does  not change; (2) provide better indication regarding the direction of  monetary policy; and (3) further improve communication by the MPC  following the publication of its edited minutes.

----------


## SteveCM

*Bangkok Post : Petrol, gasohol price cut tomorrow*

         Breakingnews          >                Published:  9/05/2011 at 03:43 PMOnline news:PTT and Bangchak  announced on Monday they will  reduce the pump prices of all kinds of petrol, except gasohol E85, by 60  satang per litre from 5am tomorrow, to reflect a fall in the  global  oil price.

 The price of gasohol  E85 will be cut by 30 satang per litre.

 The prices per litre of petrol in Bangkok and nearby provinces will  be: petrol  91 - 42.94 baht; gasohol 95 - 38.04 baht; gasohol 91 - 35.54  baht; gasohol E20 - 34.64 baht; and gasohol E85 - 22.32 baht.

 The price of diesel will remain at 29.22 baht per litre.

----------


## socal

> *Bangkok Post : Petrol, gasohol price cut tomorrow*
> 
>          Breakingnews          >Published:  9/05/2011 at 03:43 PMOnline news:PTT and Bangchak  announced on Monday they will  reduce the pump prices of all kinds of petrol, except gasohol E85, by 60  satang per litre from 5am tomorrow, to reflect a fall in the  global  oil price.
> 
>  The price of gasohol  E85 will be cut by 30 satang per litre.
> 
>  The prices per litre of petrol in Bangkok and nearby provinces will  be: petrol  91 - 42.94 baht; gasohol 95 - 38.04 baht; gasohol 91 - 35.54  baht; gasohol E20 - 34.64 baht; and gasohol E85 - 22.32 baht.
> 
>  The price of diesel will remain at 29.22 baht per litre.


None of this inflation is exclusive to Thailand. There is world wide inflation because of the bailouts in 2008 and all the currency pegs to the US dollar.

----------


## SteveCM

^^
All change.....  :mid: 

*Bangkok Post : PTT raises pump prices*

         Breakingnews          >                

Published: 11/05/2011 at 03:16 PMOnline news:
 PTT announced on Wednesday that it is increasing  pump prices by 60 satang a litre for petrol and 30 satang for gasohol  E85, effective from 5am on Thursday, May 12.

 The countrys largest oil conglomerate cited the increasing global oil prices that reduced its marketing fee.

 Caltex had this morning raised its petrol prices.

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## SteveCM

*Confidence drops on fears of higher living cost*

12 May 2011

*Confidence drops on fears of higher living cost*

             By Petchanet Pratruangkrai
The Nation

*Rising living cost has plunged consumer confidence  index (CCI)for the third consecutive months to 79.6 points in April,  according to the survey by the University of the Thai Chamber of  Commerce.*

                              Due mainly to concerns over higher cost of living, the index is expected to remain week in the next few months. 

However,  consumers showed higher confidence in their future,  thanks to the upcoming general election and continued growth in global  economy, said vice president of the UTCC's Research Division Saowanee  Thairungroj.

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## SteveCM

> ... consumers showed higher confidence in their future, thanks to the upcoming general election...


Make of that what you will...... expecting a change of government?  :mid:

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## SteveCM

> ^^
> All change..... 
> 
> *Bangkok Post : PTT raises pump prices*
> 
>          Breakingnews          >Published: 11/05/2011 at 03:16 PMOnline news:PTT announced on Wednesday that it is increasing  pump prices by 60 satang a litre for petrol and 30 satang for gasohol  E85, effective from 5am on Thursday, May 12.
> 
>  The countrys largest oil conglomerate cited the increasing global oil prices that reduced its marketing fee.
> 
>  Caltex had this morning raised its petrol prices.


All change _again_ or is it "as you were"? Maybe it's easier just to assume that prices will rise on even dates and drop on odd dates - kind of like which side of the road parking restrictions apply to.....  :mid: 

*
Bangkok Post : PTT, Bangchak to cut pump prices*Published: 13/05/2011 at 03:40 PMOnline news: EconomicsPTT and Banchak Petroleum announced on Friday  afternoon that they are cutting the pump prices by 40 satang per litre  for all kinds of petrol and 20 satang a litre for gasohol E85.

Effective from early morning on Saturday, the new retail prices of  fuels at the two oil firms Bangkok outlets will be 22.42 baht a litre  for gasohol E85, 34.84 baht for gasohol E20, 38.24 baht for gasohol 95,  35.74 baht for gasohol 91 and 43.14 baht per litre for petrol 91.

The price of diesel remains unchanged at 29.99 baht per litre.

----------


## Mid

*May inflation rises sharply by 4.19%*

*Inflation in May rose 4.19 per cent from the same  period last year and 0.34 per cent from the previous month, according to  Commerce Ministry's data.*

  The May figure boosted the Consumer Price Index in the first five  months of the year to rise 3.45 per cent, said Commerce Permanent  Secretary Yanyong Phuanrach. 

 In May, core inflation - which does  not include volatile prices of commodities and food - rose 2.48 per  cent compared to the same period last year and 0.46 per cent on month.  The core inflation in the first five months increased 1.79 per cent on  year.

 According to Yanyong, the annualised inflation target remains 3.2-3.7 per cent.

  Today, the Bank of Thailand's Monetary Policy Committee convenes on the  policy rate,  widely expected to be raised by 25 basis points to tame  inflation.

nationmultimedia.com

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## SteveCM

^
Anyone who seriously believes these inflation figures actually reflect the % increase in the day-to-day cost of living has plainly not set foot in a market or grocery store in the last year and more. In many cases, the increases are closer to 25%.

Just today, there's a Bkk Post report citing Abhisit's belated interest in the cost of pork and eggs. A little late, Mark - _very_ late, in fact. People already noticed.


*Bangkok Post : PM wants egg and pork prices cut* 

Business          >         Economics       

*PM wants egg and pork prices cut*Published: 31/05/2011 at 06:16 PMOnline news: EconomicsCaretaker Prime Minister Abhisit Vejjajiva on  Tuesday has authorised the Commerce Ministry to consider ways to reduce  the pork and egg prices without hurting farmers.



Mr Abhisit told the ministry that eggs can be reduced in price by at  least 0.20 baht each and pork should also be cheaper. The information  showed the raw material costs for pork production can be cut without any  bad impact on farmers.

The ministry on Monday reported that egg and pork prices are likely to drop because more supplies are coming onto the market.

The  Internal Trade Department reported egg prices as of May 18 at about  2.90 baht each in mixed sizes, and 3.30-3.40 baht each for size three  eggs.

The ministrys price suggestion was 2.90 baht an egg, and 135 baht a kilogramme for pork red meat.

Deputy  government spokesman Vachara Kannikar, said the ministry reported that  businesses asked to increase prices for 11 products in March -- palm  oil, soybean oil, fresh milk, fertiliser, steel, batteries, tyres,  electrical wire, soap, lubricant oil and monosodium glutamate.

The ministry allowed increases for only four products - palm oil, soybean oil, fresh milk and fertiliser.

He  said interim Deputy Prime Minister overseeing security Suthep  Thaugsuban told the cabinet that the ministry has the authority to  immediately reduce palm oil prices without seeking approval of the  National Palm Oil Committee because 47 baht a litre was only a ceiling  price.

Farmers also have already sold fresh raw palm oil at less than six baht per kilogramme.

The  ministry reported it is likely to adjust prices of five products  because of higher costs of raw materials. They included an increase of  15 to 27 per cent in raw material costs for batteries, 51 to 70 per cent  for electrical wire, and 37 to 90 per cent for raw materials for steel  products.

The price of raw rubber for tyres increased by 169 per  cent, with an increase of 42 per cent for tapioca, a raw material for  making monosodium glutamate.

Meanwhile, the Bank of Thailand  (BOT) said in its latest monthly economic report that the countrys  manufacturing production  shrank 7.8 per cent in April from the same  period last year, 

BOTs senior director for domestic economy  Mathee Supapongse said the decline in manufacturing was attributable to  supply disruption in the automobile industry in Japan.

Private  consumption grew by 4.5 per cent year-on-year, slowing down from the  previous month, reflecting mainly a decline in domestic vehicle sales in  light of a shortage of engine fans from Japan.

"The impact from  the earthquake and tsunami [on March 11] in Japan on local automotive  and electronics manufacturing is expected to last until the fourth  quarter, but it is likely to ease in the third quarter of the year," Mr  Mathee said.

Exports totalled US$17.24 billion, a 24.7 per cent  year-on-year growth; imports totalled $17.7 billion, up 26.3 per cent  year-on-year in April. The economy recorded a $477 million trade deficit  and $165 million current account deficit in April.

----------


## Mid

> Mr Abhisit told the ministry that eggs can be reduced in price by at least 0.20 baht each


 :smiley laughing: 

sell 'em by the kilo don't they ?   :bananaman: 

_It  is the government's idea to reduce cost of people's cost of living. _ 

https://teakdoor.com/thailand-and-asi...gs-please.html (Thailand : 1/2 kilo of eggs please ......)

----------


## SteveCM

^ & ^^

At the risk of straying a bit off topic and borrowing from what's properly the domain of the election thread, you really have to wonder if Mark & Co only stumbled on this whole cost of living thing while out meeting the - _ugh_ - people in the last week or so and getting an earful in the process.

----------


## SteveCM

*Thai-ASEAN News Network*

*The Wrong Formula*

UPDATE : 3 June 2011                     

Thailand has been caught in a state of  successive bad luck as of late with daily living costs sky rocketing,  inflation following suit and the policy interest rate inching up four  times in only five months. The Commerce Ministry announced inflation in  May at 4.19 percent due to price hikes in food and drink products. This  does not mean, however, that in May, construction materials, textiles  and services didn't also move up in price. To summarize the Commerce  Ministry's report, living in Thailand this past May came at a hefty  cost.

Almost simultaneous to the inflation rise, the Bank of Thailand's  Monetary Policy Committee announced that the policy interest rate would  increase 0.25 percent from 2.75 to a solid 3 percent. Citing inflation  directly, the national bank has raised the ceiling for commercial banks  across the country to hike their lending rates.

The Bank of Thailand's decision is, in economic theory, the correct  course of action. When inflation soars and money is devalued, the state  must try its best to peg product prices and cool down the economy by  cutting down the supply of cash in the system.

The circumstances of Thailand's rising inflation, however, is not  “textbook” making by-the-book approaches to it rather tricky. The  Kingdom's heightened inflation is not purely a matter of demand, but is  due in large part to the record prices of world oil. Domestically, the  problem is being worsened by populist spending and vote-baiting  infrastructural projects driving inflation to climb much faster than  natural.

These two extraordinary factors make the traditional solution of policy  interest rate adjustment miss the mark of deflating the economy. Higher  interest rates affect all debtors, a distinction shared by many a Thai,  from farmers and motorcycle taxi drivers to real estate developers.  Tougher interest for debtors thus means that their ability to repay is  made just that much more difficult; this combines with the  aforementioned high daily living costs to form a demoralizing burden on  much of the population and also poses the threat of flooding the system  with non-performing loans and bankruptcy cases.

While it is tempting to remain at a status quo during a change in  government, the Bank of Thailand should not blindly believe that  following the formula of “address high inflation with high interest  rates” will suffice. A tweak is definitely needed if the state bank  wants to effectively curb living costs for the Thai people, perhaps even  a completely new formula.

*Post Today, June 3, 2011

Translated and Rewritten by Itiporn Lakarnchua*_

Please note that the views expressed in our "Analysis" segment are  translated from local newspaper articles and do not reflect the views of  the Thai-ASEAN News Network._

----------


## Mid

> successive bad luck


* sadly shakes head *

----------


## SteveCM

*Inflation, rates expected to cut new business launches*

BUSINESS »

               By Petchanet Pratruangkrai 
The Nation
                                             Published on June 4, 2011                

*The rate of new businesses launching in Thailand is  expected to fall in the next few months due to concerns over higher  inflation and interest rates.*

                              Investors are also in the "wait and see" mood over government policy. 

 The Business Development Department reported yesterday that the  number of newly registered companies in May dropped 4 per cent month on  month as enterprises slowed down their expansion plans because of the  end of the current government's term and the impact of rising prices.  

 Deputy Commerce Minister Alongkorn Ponlaboot said new businesses  would grow slowly in June and over the next few months as investors  wanted to see stable policies after the election. They also face rising  costs of investment due to higher inflation and interest rates.  

 Other factors putting the brakes on include higher oil prices;  concern over the global economy, particularly the European Union's  financial problems; the deficit in the United States; and the impact of  the tsunami on Japan's supply chain and industries and on investment  overseas.  

 However, the number of new businesses in Thailand in May grew an  impressive 38 per cent year on year to 4,862 firms, though this was due  to the low base a year earlier, when political protests gripped  Bangkok. The new companies' combined investment capital was Bt69.51  billion, up 346 per cent from April and 205 per cent from the same  period last year.  

New businesses that were registered last month were mostly  involved in construction and property development, kitchenware  manฌufacturing, entertainment and food production.  

In the first five months of the year, the number of new companies  grew 25 per cent to 26,101 firms with comฌbined initial investment  capital of Bt130 billion.  

More businesses ceased operaฌtions last month than in April. The  rate was up 34 per cent month on month and 66 per cent year on year to  681 firms due to higher operation costs.  

A total of 3,038 firms closed down in the first five months of this year, up 21 per cent year on year.  

<snip>

----------


## SteveCM

*Thai economy to grow 3.7 per cent in 2011: World Bank*

BANGKOK, June 8

The World Bank on Wednesday maintained a steady  economic outlook for Thailand with  3.7 per cent of the Gross Domestic  Product (GDP) projected as this year's growth but warning that the  countrys inflation is on the rise.

 Frederico Gil Sander, a Bangkok-based World Bank economist, told a news  briefing on Thailands economic prospects that the countrys economy  this year will continue to grow at the rate of 3.7 per cent.

 The Thai economy in the first quarter of this year expanded more than  earlier forecast but growth in the second quarter was at a slower pace  owing to effects of the devastating March 11 earthquake and tsunami in  Japan.

 The World Bank economist viewed that the Thai economy in the second half  of this year will face some risk factors, including the European public  debt crisis, Chinas economic slowdown due to the ongoing tightening of  its monetary policy, rising oil prices and domestic political stability  after the July 3 general election.

 However, the bank will revise its figure upward if the risk factors lessen.

 Meanwhile, Mr Sander cautioned that the countrys inflation will be  steadily rising given that the government will gradually lift its  price-control measures and diesel subsidy scheme which capped the fuel's  price at Bt30 per litre (about US$1)

 The economist said, however, that he believed that inflation is unlikely  to cause price crisis as the Bank of Thailand could produce measures to  keep inflation at bay.

 In the meantime, the worlds leading financial institute projected that  the 2011 global GDP to slow to 3.2 per cent, before edging up to 3.6 per  cent in 2012, according to its Washington-based June 2011 edition of  Global Economic Prospects.

 Currently, global financial stability is confronted by rising oil and  food prices which have negative consequences on the worlds economy,  Hans Timmer, director of Development Prospects at the World Bank said in  the bank's latest report.

 Mr Timmer explained that food price controls have negative impacts and  results in spending a flood of money to subsidise prices in each  country. He advised individual nations to proceed with food aid-related  measures to support the poor, build food banks as well as not export  food from some countries facing food shortages.

 However, the commodity prices are likely to drop which will benefit the prices in each country.

 In the East and Pacific region, the growth is projected to slow but  remain strong, with GDP gains easing from 9.6 per cent in 2010 to 8.5  per cent in 2011.

 The inflation in the region having reached 5.3 per cent in April 2011  remains a challenge for the regional economy, particularly in China and  Thailand.

 Mr Timmer urged the countries to solve domestic problems and to proceed  with strict monetary and fiscal policies to tackle the inflation and the  accelerating commodity prices.

 The ongoing tightening of monetary and fiscal policies is projected to  contribute to the projected slowing in growth toward more sustainable  growth rates. 

(MCOT online news)

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## SteveCM

From Twitter today:

TAN_Network   TAN News Network                                               

       Esso raises diesel price by 40 satang/lr to Bt30.39/lr this morning; PTT, Bangchak still keep price at Bt29.99/lr

3 hours ago

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## SteveCM

^ All the signs have been that breaking through the 30 baht ceiling on diesel is an absolutely sacrosanct no-no - for very obvious electoral reasons now. With a bit under 3 weeks to go to the election, it much increases the likelihood of other suppliers following suit in a critical period. Can't see the Dems liking this.....

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## SteveCM

*Politics may fuel inflation*

BUSINESS »

*INTEREST RATE* 
*Politics may fuel inflation*


                            By SEETALAVAJIT SABAYJAI
THE NATION
                                             Published on June 14, 2011                



*Domestic politics could push the Bank of Thailand  into raising interest rates again in the second half of this year to  vent inflationary pressure, according to HSBC.*

 "There is concern over the new political power on July 3. It  is inflationary if [incoming politicians] promise a lot of things,"  Wellian Wiranto, the bank's Singapore-based Asian economist, said  yesterday.

The central bank is expected again to hike the policy  interest rate by 50 basis points, possibly in the fourth quarter of the  year, to bring it up to 3.50 per cent by year-end, according to HSBC.

May's  headline inflation stayed close to economists' expectations at 4.19 per  cent while core inflation, which excludes volatile raw-food and energy  prices, breached market forecasts to hit 2.48 per cent.

In the  next few months, the pent-up price pressure will come down and  inflationary pressure could build up again after the new government  takes office.

"We might see the central bank tightening near the end of the year if inflation does not tempt [ease]," he said.

In  addition, the rising pass-through in prices of products is likely going  from the headline figure to core prices, Wiranto said, agreeing with  the view of the central bank's Monetary Policy Committee that the core  figure could surpass the upper end of the inflation target. The central  bank's target range for core inflation is 0.5-3 per cent this year.

This  year's headline inflation is estimated to reach 4 per cent and core  prices are likely to increase 2.8 per cent, according to HSBC.

Besides  inflation, which continues to be a concern in Thailand, domestic  politics could also affect the country's long-term economic growth,  particularly by throwing a cold towel on investment.

"A challenge  is how to overcome politics," he said. The political pressure could  direct more to investment, not growth. However, investment continues to  come in.

Thailand would see much more investment if there weren't for the political issues, Wiranto said.

The  economic recovery is still robust even though there is a question mark  on domestic politics. The bank projects gross domestic product, which is  being driven by two connected engines - domestic consumption and  exports - to expand 4.9 per cent this year and 5.7 per cent next year. 

Thailand  offers many advantages, from good geographic location and a large pool  of suppliers in the manufacturing sector, especially automobile plants,  to sufficient natural resources, but the country has to improve its  education system, labour productivity and political stability, Wiranto  said.

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## SteveCM

> From Twitter today:  TAN_Network TAN News Network  Esso raises diesel price by 40 satang/lr to Bt30.39/lr this morning; PTT, Bangchak still keep price at Bt29.99/lr  3 hours ago





> ^ All the signs have been that breaking through the 30 baht ceiling on diesel is an absolutely sacrosanct no-no - for very obvious electoral reasons now. With a bit under 3 weeks to go to the election, it much increases the likelihood of other suppliers following suit in a critical period. Can't see the Dems liking this.....


And, very clearly, they _don't_ like it..... 


From Twitter today:

_TAN_Network   TAN News Network                                               

       Govt cuts diesel sale contribution to the Oil Fund by 40 satang/lr tomorrow to bring price below Bt30/lr; Oil Fund has Bt345 mln_ _

15 minutes ago_ 


How handy to have the levers under your control during an election.....  :mid:

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