News from Thailand – June 21, 2013

Thailand receives a sensitive slap on the wrist from the US for not doing enough against human trafficking. Thousands end up in the sex industry, fishing, fish processing industry and households, which amounts to 'modern slavery'.

For the fourth consecutive year, Thailand is on the US State Department's so-called tier-2 list of defaulting countries. This is evident from the report Trafficking in Persons 2013, which was published yesterday. The report examines 188 countries; 44 countries are on the tier-2 list.

Thailand was close to dropping to the tier-3 list, which means it would have had to deal with trade sanctions. Sanctions that would particularly affect shrimp exports to the US. But because the government has made a plan with measures against human trafficking, the country has escaped that dance. That is to say: Thailand has been given a year to show that it is serious about its struggle.

According to the TIP report, women and girls from northern Thailand and migrants from neighboring countries are particularly at risk of ending up in the sex industry. The government is failing to provide assistance to victims of child prostitution and doing too little to protect the rights of those who have been rescued.

In addition to the sex industry, large numbers of people are also exploited in the fishing and fish processing industry. South Asian men are put to work on fishing boats. They stay at sea for years, are not paid, are beaten and have to work 18 to 20 hours a day, seven days a week.

The report also notes widespread corruption of Thai government officials in the investigation and prosecution of victims, which benefits the thriving human trafficking industry.

According to the government, 2012 trafficking cases were investigated in 305, up from 83 in 2011, but only 27 cases were prosecuted and 10 cases resulted in a conviction.

Photo: Five Thai women return to Thailand in December 2012 after being rescued from a brothel in Bahrain.

– Singapore's air pollution index hit its highest level in 16 years yesterday. The entire city was covered in a thick layer of smog from forest fires on the Indonesian island of Sumatra.

The city-state has put pressure on Jakarta to take 'definitive action' against the fires, but the neighboring country played the ball back. According to Indonesian minister Agung Laksono, many plantations in Sumatra are owned by companies in Singapore. "Singapore is acting like a little kid and shouldn't be making so much noise," he said. The Prime Minister of Singapore refused to respond to the provocation. "I don't want to get involved in megaphone diplomacy."

The misery in Singapore may last for weeks until the end of the dry season in Sumatra. Drugstores are now out of stock of face masks. Residents are losing patience and are angry and concerned, Singapore's environment minister said.

– With three measures, the Bank for Agriculture and Agricultural Cooperatives (BAAC) is prepared to accommodate farmers who cannot sell their paddy (brown rice) for 15.000 baht per ton. The bank is thinking of interest rate cuts, new loan terms for the next harvest and privileges when participating in the government's insurance program. The Board of Directors of the BAAC will make a decision on this shortly. The bank estimates that 200.000 farmers with 3 million tons of paddy are eligible for the measures.

Chanudpakorn Wongseenin, vice president of the Public Warehouse Organization (PWO, one of the two organizations taking delivery of the paddy), insists that farmers will receive 30 baht for their paddy until June 15.000. From that date, the price will drop to 12.000 baht, the cabinet decided this week. But elsewhere in the newspaper it is reported that the PWO has not received rice since yesterday until June 30th.

After the cabinet decision, some millers would have already decided on their own initiative to no longer accept rice and the farmers a so-called bai pratuan with which they can collect the guaranteed price from the BAAC.

President Wichian Phuanglamchiak of the Thai Farmers Association calculates the farmers' production costs at 9.000 to 10.000 baht per ton. In practice, the farmers do not even get 15.000 baht per ton, but 11.000 to 12.000 baht per ton because the moisture of the rice is too high, due to contamination or tampering with the scale.

[In the report 'Rice guarantee price reduction: Farmers sharpen the knives', production costs in Kao Lieo (Nakhon Sawan) district are set at 5.060 baht per ton. In addition, the yield would be 1 ton per rai. However, the average yield per rai is 424, 450 or 680 kilos (Source: Bangkok Post, December 19, 2011, April 19, 2012)]

– The law faculty of Chulalongkorn University has apologized to five fourth-year students, who have to pack their bags. The students are victims of a teacher who failed to provide their grades for a first-year course. They regularly sounded the alarm over the past two years, but that had no effect whatsoever. The university has formed a panel that will investigate whether the lecturer in question has committed a crime of office.

– The SET Index plunged 3,29 percent yesterday as investors withdrew their money in response to the US Federal Reserve's announcement that its QE program would be wound down later this year. The baht retreated to 31 against the dollar.

The Bank of Thailand has warned that capital outflows from Thailand could continue amid the FED's optimism about the US economic outlook. But that shouldn't be a problem as Thailand's foreign reserves stood at $7 billion as of June 176,5.

After the opening bell of the Stock Exchange of Thailand (SET), the index dipped below the psychological barrier of 1.400 to a low of 1.390,33. By closing time she had crept up to 1.402,19 points. The Thai bond market also came under pressure from sales by foreign players with net sales of 3,71 billion baht.

Since May 23, when FED Chairman Ben Bernanke announced that the FED was considering pruning QE when the US economy strengthened, foreigners have sold more than 100 billion baht worth of Thai stocks and bonds.

– During a firefight in Raman (Yala), a top man of the resistance movement Runda Kumpulan Kecil was shot dead and three officers were injured. Police were tipped that Madaree Taya was hiding in a home along with other insurgents. The other insurgents managed to flee.

In Mayo (Pattani), three soldiers were injured when a bomb exploded. The soldiers were part of a team on foot patrol.

– The police arrested a second suspect of the bomb attack in Ramkhamhaeng at the end of last month. He was handcuffed in Muang (Narathiwat) on Wednesday night. The first suspect was also arrested there. Police are still looking for two other suspects. Seven people were injured in the bomb attack. It is being investigated whether the suspects have ties with resistance groups in the South.

– Two men suspected of tax evasion in the import of luxury cars have reported to the police. They were released after posting 2 million baht bail. The Department of Special Investigation says it has enough evidence.

The pair are registered as owners of the six cars that caught fire while being transported in Nakhon Ratchasima at the end of May. They are charged with smuggling, tax evasion, illegal sale of the cars and transport without a permit.

– The paint factory of KA Paint Ltd Partnership in Muang (Samut Sakhon) was reduced to ashes yesterday morning. The fire brigade had difficulty reaching the factory because of the narrow streets in the area. It took her approximately 2 hours to bring the fire under control. There were several explosions during the fire, but no one was injured. Residents fled their homes in panic.

– A 4-year-old girl was run over by a school bus in Muang (Nakhon Si Thammarat). The girl had just got out and leaned over to grab her bag that had fallen. She ended up under the rear wheels of the van and died on the spot. The mother, seeing it happen, went into shock and passed out. The driver will be prosecuted for reckless driving.

– Three students of the Rajamangala University of Technology were injured in a fight in Ayutthaya. Students from two university campuses had come to blows. The reason was the refusal of a first-year student to initiate new students.

– Wat Phra Mahathat Woramahawihan in Nakhon Si Thammarat will almost certainly be added to Unesco's draft World Heritage List. The World Heritage Committee (WHC) in Phnom Penh will decide on this today. The temple is said to contain some relics of Buddha. The main stupa, Phra Borommathat, was built in the early 13th century.

Three Thai proposals for the 2004-2011 draft list have been confirmed by the WHC. They concern the Kaeng Krachan Forest complex; Phimai, its Cultural Route and the Associated Temples of Phanomroong and Muangtam; and Phuphrbat Historical Park. None of the three has been nominated as a World Heritage site.

– Fifty members of the Thailand Ban Asbestos Network demonstrated yesterday at the Ministry of Health against a possible postponement of a ban on the use of asbestos. The ministry will publish a report on this next week, after which the cabinet will take the plunge.

According to the network, it appears that the asbestos industry is trying to stop the ban, despite the WHO's warning that all forms of asbestos are carcinogenic. Fifty countries have already banned asbestos.

Thailand has banned five types, but not chrysotile, an asbestos used as insulation material in construction, flooring, brake linings and clutch plates, and household appliances such as toasters, irons and ovens.

The National Economic and Social Development Board pushed for a ban as far back as 2010. The government confirmed it in 2011, but the ministries of Industry and Health had to conduct additional research into the risks if necessary. The Ministry of Industry wants the ban delayed for 3 to 5 years; the Ministry of Health wants a ban within six months.

Economic news

– Now that the government has decided to lower the guaranteed price for paddy from 15.000 to 12.000 baht per ton, the Thai Rice Exporters Association expects exports to pick up this year. Earlier the exporters predicted 6-6,5 million tons, now they expect to be able to export 7 million tons and in 2014 8 million tons.

Since October 2011, the government has paid a price for the paddy that is approximately 40 percent above the market price. For the first season 2011-2012, a loss of 136,9 billion baht is taken into account.

Whether it actually succeeds in boosting exports depends on the reaction of Vietnam and India to Thailand's price reduction. They could also lower their prices, taking away Thailand's advantage. On the world market, the price of a ton of 5% white Thai rice has fallen to $532 this year, the lowest since January 2012. Rice of the same quality from India costs $445 and Vietnam $370.

– The Thai Chamber of Commerce (TCC) urges the government to play its cards open when selling rice from its stock. Stop the secret sales and return to the auction system, because an auction generates much less losses.

The loss on the mortgage system amounted to 136 billion baht in the first year, according to the Ministry of Finance. That amount is based on all expenses, including management costs, interest payments and the estimated value of the rice stock as at 31 January.

The Rice Policy Committee has not yet released loss figures for the current season. The Ministry of Finance estimates the loss so far at 84 billion baht (first harvest).

Isara Vongkusolkit, chairman of the TCC, is deeply concerned about the mortgage system, both about the buying and selling figures, government stock size, profit/loss figures and possible future losses that are still being kept confidential.

"This ambiguity undermines public and business confidence and will ultimately affect the country's credit rating and increase the cost of borrowing for government and business."

The TCC supports the government's policy of increasing poor farmers' incomes, but this must be done without disrupting the market. It is better to encourage farmers to produce more efficiently, to reduce production costs, for example by constructing water reservoirs and by making artificial fertilizers available, as well as rice varieties that are more resistant to rain.

– The passenger flow on Suvarnabhumi has decreased by 6,83 percent on an annual basis in the first five months of this year, but that does not mean that the congestion has come to an end. Survarnabhumi handled 21,8 million passengers and 120.900 flights.

The reduction is mainly due to the relocation of LCC flights to Don Mueang Airport (LCC = low-cost carrier), which has been hosting these flights since October last year.

Without the move, passenger flow would rise to 60 million this year, significantly exceeding the capacity of 45 million travelers, but now 53 million passengers are taken into account, 1 million more than last year.

International traffic increased by 5,24 percent to 18 million passengers in the first five months of this year and domestic volume fell by 39 percent to 3,79 million passengers. The number of flights rose and fell by 1,9 percent (to 95.355) and 42,9 percent (25.554) respectively.

Don Mueang was of course good for strong growth figures: it processed 6,72 million passengers (plus 661 percent) and the number of flights increased by 355 percent to 58.042. Most flights were provided by Thai AirAsia and Nok Air.

The expansion of Suvarnabhumi, which will increase capacity to 60 million passengers, is expected to be completed by the end of 2016. Rawewan Netrakavesna, general manager of Suvarnabhumi, calls the maintenance an "uphill task" as the airport is heavily used for most of the day. "Most of the work can only be done between 2 and 4 am," she says.

– It is virtually impossible for Thailand to produce 2013 million tons of sugar in the upcoming 2014-13 crop season, says Sopone Tirabanchasak, director of sugar trader Siam Brit Co. The target of 13 million tons, 30 percent more than this year, has been set by the Office of the Cane and Sugar Board (OCSB). Sopone considers the prognosis unrealistic, because the area planted with sugar cane would then have to grow at a rapid pace. Eleven million seems achievable to him, provided there is enough rain.

Thailand, the world's second largest sugar exporter, harvested a record 2012 million tons of sugar cane in the 2013-100 season, 2 million more than the previous season. Sugar production remained constant at 10 million tonnes as the amount of commercially extractable sugar decreased compared to the previous season.

Naradhip Anantasuk, manager of the Sugar Cane Planters Association, thinks that the harvest will hardly increase in the coming season, with the exception of the North and North East, where a number of sugar factories have moved. He gives two reasons: Thailand cannot expand the area and nobody wants to plant sugar cane now because the cultivation of rice generates more income. Sugar prices are also unlikely to reach 23 to 24 cents per pound this year, Naradhip said.

But OCSB Secretary General Somsak Suwattiga insists that 13 million tons is achievable. The area cultivated with sugar cane, currently 10 million rai, is expected to increase to 11,35 million rai, he says. He also points out that the demand for sugar is high in Asia.

www.dickvanderlugt – Source: Bangkok Post