Rice: an unstable staple?

September 26, 2011 1:40 pm by Tim Johnston

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Rice is more than just another commodity: for 3bn people it is a vital part of their daily diet, and when prices hit over $600 a tonne, or some 50 per cent above their 10 year average, they start to worry.

The 10-year average for Thailand’s benchmark 100 per cent grade B white rice is around $400 a tonne but today it is selling for $619 a tonne. That is partly because Thailand, the world’s biggest exporter, has said that it would pay its farmers Bt14,800/tonne – equivalent of about $800/tonne in the export market, in a move aimed at boosting the incomes of rural farmers. Continue reading »

Tags: food prices, rice Posted in Asia, Cambodia, Myanmar, Thailand, Vietnam | Permalink

Thailand looks to domestic demand

September 23, 2011 9:22 am by Tim Johnston

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You don’t hear so much about ‘rebalancing’ these days. But Asian consumers are quietly starting to take up some of the slack from the slowdown in developed markets.

Since 2008, Asian policies have put the emphasis on boosting domestic demand – especially in China, which is no longer just an assembly point but a powerful growth engine for the rest of the region. Now Thailand seems to be getting in on the act. Continue reading »

Tags: consumption Posted in Thailand | Permalink

Tesco in Thailand: profit from necessity

September 21, 2011 12:19 pm by Tim Johnston

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Tesco didn’t get where it is today without good timing.

Wednesday’s news that Tesco (TSCO:LSE) is to hive off 15 of its Thai hypermarket sites into a listed property fund worth some Bt14bn ticks three important boxes for new chief executive Philip Clarke. First, freeing up some of the cash tied up in Tesco’s £35bn ($55bn) global property empire; next, taking advantage of renewed investor interest in Thailand; and last, reducing some of the company’s vulnerability to legal challenges over its property ownership in Thailand. Continue reading »

Tags: Tesco Posted in Asia, Global, Thailand | Permalink

Thai rice plan risks boosting world price

September 14, 2011 10:59 am by Tim Johnston

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The ramifications of a controversial new rice intervention buying scheme in Thailand, designed to boost farm incomes, are starting to become clear.

Nomura is saying that it could give a significant boost to Thailand’s already high inflation, and others are warning of upsets in the international markets. Continue reading »

Tags: food & drink, food prices Posted in Thailand | Permalink

Banpu steps up resource race

September 12, 2011 2:17 pm by Tim Johnston

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The resource race may have calmed down a bit recently but it hasn’t gone away.

Banpu, Thailand’s biggest coal producer, went back into the market on Monday, making a cash offer of A$423m for the 88 per cent of Perth-based miner Hunnu Coal it doesn’t already own. The offer, which has been recommended by Hunnu’s board, is 30 per cent above Thursday’s closing price. Trading was suspended on Friday pending the announcement. Continue reading »

Tags: M&A, mining Posted in Asia, Thailand | Permalink

Thai central bank fears inflation more than new government does – for now

August 24, 2011 10:57 am by Tim Johnston

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Thailand’s central bank has defied government pressure and slowing economic growth to lift interest rates once again.

The Bank of Thailand’s Monetary Policy Committee met on Wednesday and raised the benchmark one-day repo rate by 25 basis points to 3.5 per cent, its tenth increase in 11 meetings. The reason: inflation.

Tags: monetary policy Posted in Asia, Thailand | Permalink

Thai GDP: Japan quake after-shock

August 22, 2011 9:05 am by Tim Johnston

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The Japanese earthquake isn’t done shaking Asian markets yet.

Thailand released its second quarter GDP figures on Monday, logging a disappointing 2.6 per cent year-on-year increase – far short of the 3.6 per cent expected in the markets – as the March 11 earthquake choked the country’s key automobile industry.

With this unpleasant reminder of the uncertainties permeating the global economy, the central bank will now have a tricky decision when it meets on Wednesday – press ahead with an expected rate increase to cool domestic demand or sit and wait. Continue reading »

Tags: economy, Japan earthquake Posted in Thailand | Permalink

Burma: a surprising currency crisis

August 15, 2011 1:00 pm by Tim Johnston

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Burma’s got a currency crisis, but it isn’t what you would expect.

The kyat has appreciated by almost 25 per cent on the grey market over the past year, and the country’s export industries, never in good health at the best of times due to a combination of sanctions and the government’s economic illiteracy, are struggling even more than usual. Continue reading »

Tags: currencies Posted in Asia, Myanmar | Permalink

Burma: getting back on the map

August 2, 2011 9:01 am by Tim Johnston

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South-east Asia has a new challenger on the tourism block: Burma.

The ministry of hotels and tourism announced in June that arrivals were up almost 25 per cent for the first five months of the year, statistics that are supported by anecdotal evidence. A traveller looking for a last-minute room in Rangoon last week found the first hotel he tried fully booked – and this is the low season. Continue reading »

Tags: beyondbrics on the beach, tourism Posted in Myanmar | Permalink

Yingluck’s populist policies: economic cost?

July 29, 2011 10:03 am by Tim Johnston

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Thailand has managed weathered the political uncertainty of the elections, but now, as parliament is expected to sit for the first time on Monday, it is the turn of the economists to get worried.

What do they think of the raft of populist policies the winning party of prime minister-elect Yingluck Shinawatra has promised, which include a 40 per cent rise in the minimum wage, increased social security and a slew of major infrastructure projects? Continue reading »

Tags: economic growth, monetary policy, politics Posted in Thailand, Uncategorized | Permalink

Thai interest rates: up and up again

July 13, 2011 11:00 am by Tim Johnston

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The Bank of Thailand put up interest rates by a further 25 basis points on Wednesday, to 3.25 per cent, and indicated that the trend was still upwards.

The Bank of Thailand has been among the most aggressive of the Asian central banks in raising rates – starting last July it has added a quarter of a percent at seven of its eight most recent meetings – but inflation is still creeping up. Continue reading »

Tags: inflation Posted in Thailand | Permalink

Thai vote: Thaksin-linked stocks soar

July 4, 2011 9:17 am by Tim Johnston

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The relationship between the business of politics and the politics of business has always been close in Thailand, but just how close became very clear on Monday morning when the markets responded to the convincing election win by the opposition Puea Thai party, led by allies of the exiled Thaksin Shinawatra.

The stock market overall was up more than 4.6 per cent on hopes that Puea Thai’s decisive victory would bring stability after prolonged conflict. But there were some strange – or perhaps not so strange – variations. Continue reading »

Tags: politics, stock exchanges Posted in Thailand | Permalink

Thailand: election bad for inflation

July 1, 2011 7:23 am by Tim Johnston

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Whoever wins this Sunday’s elections in Thailand, it looks like inflation control is going to be the loser.

Both of the leading parties have made extravagant promises of increased minimum wages, expensive infrastructure projects and better social security. But the Bank of Thailand is warning that increased spending is going to make it harder to control inflation.

Posted in Asia, Thailand | Permalink

Burma cracks down on better pay

June 9, 2011 9:57 am by Tim Johnston

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Burma says it is reforming but evidently some habits die hard.

According to The Irrawaddy magazine, the Union of Myanmar Federation of Chambers of Commerce has asked the government to crack down on employers who have the temerity to offer their employees better wages. Continue reading »

Tags: employment, regulation Posted in Asia, Myanmar | Permalink

Asean: a start to cross-border M&A

June 6, 2011 9:19 am by Tim Johnston

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There has been a lot of talk about Asean 2015, a regional free-trade zone that could promote cross-border business ties in south-east Asia, but to date there has been very little corporate consolidation.

Could that be changing? Thailand’s Siam Cement announced on Monday that it has spent $100m on expanding its presence in Indonesia, buying a ceramic tile producer and a distributor. It’s not a big deal- but Siam Cement is a big company and the move suggests that in Thailand at least, corporate thinking is shifting. Continue reading »

Tags: M&A, trade Posted in Asia | Permalink

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