Prime Minister Yingluck Shinawatra vowed to take “ultimate” legal action against those found cheating in the rice pledging scheme. Meeting with provincial governors nationwide on Wednesday, she said the rice subsidy programme was aimed at elevating farmers’ quality of life and it could not be said if it was a losing or profitable scheme.
She instructed provincial governors to urgently explain the rice policy to the people in the wake of conflicting information perceived by the Thai public, allegations of corruption and public concern regarding the government’s overspending.
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Several points worth mentioning:
- U.S. rice supplies continue to dwindle and confidence in the USDA’s numbers is also dwindling. The industry says prices should have been higher earlier in the year to better ration demand and now domestic users and exporters are struggling to cover commitments.
- Global financial markets look troublesome. At some point the U.S. Federal Reserve will hike interest rates which may strengthen the U.S. dollar and potentially reduce capital available for investment. The World Bank cut its global growth outlook to 2.2% growth this year from 2.4% citing slower emerging market growth. Europe’s debt crisis may worse due to demographics. Europe is seeing waves of migration on a not witnessed since the 1800s due to high unemployment and few opportunities. Confidence in Japan’s ability to reflate its economy and reignite growth is faltering.
- Indonesia, Philippines, and Malaysia – historically big rice importers – are still mostly absent from the market.
- Vietnam has shipped about 2.86 million tons January- June 6, about the same pace as last year. Vietnam rice quotes continue to bump along a 2-year low with locals saying more price declines are likely.