Vol. V No. 18 - Saturday April 29, - May 5, 2006
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BUSINESS 
HEADLINES [click on headline to view story]:

Thailand to help develop quality of rice in Vietnam

BOT may allow baht to appreciate to control inflation rates

Gasoline prices likely to surge to Bt30 per liter

Foreign investors pass on ‘small potatoes’ motorway projects

Thailand to help develop quality of rice in Vietnam

Thailand has agreed to help develop the quality of rice in Vietnam by working out a blueprint for a full-circle management system for Vietnam’s rice production and sales, which will eventually be used as a model to boost exports and prices of rice on the world market, according to the Thai Ministry of Commerce.

Rather than viewing Vietnam as a major competitor, Thailand is choosing to work cooperatively with the leading nation in Indochina.

The cooperation followed a request by Vietnam’s rice producers and exporters recently, director-general of the ministry’s Department of Foreign Trade Rachane Potjanasuntorn told journalists last Friday.

“Thailand’s management of rice trade, from harvests to local sales and shipments overseas, is recognized by Vietnam,” he said.

Thai delegates comprising of senior officials and representatives of the private sector, led by Permanent Secretary for Commerce Karun Kittisataporn, will visit Vietnam in June. Their goal is to meet with their Vietnamese counterparts to discuss and work on a blueprint, which will detail the development of Vietnam’s rice harvests, as well as warehouse, sale and shipment management systems and even solutions to rice trade.

“The blueprint will become a model for expanded cooperation among major rice exporters in the region, including Vietnam, Thailand, China, India and Pakistan,” he noted.

“It will eventually also help boost global trade of quality rice and stabilize rice prices on the world market,” he added.

The first cooperative project among the five major rice exporters is expected to be a joint shipment of quality rice to the Middle East, a world major rice importer, according to the department’s chief. (TNA)


BOT may allow baht to appreciate to control inflation rates

The Bank of Thailand (BOT) may allow the Thai baht to strengthen by market mechanism in a bid to control inflation rates, according to a leading financier.

Supavuth Saicheu, president of Phatra Securities Public Company Limited Research Division, said that given the current circumstance, it is justifiable if the central bank let the baht appreciate by market mechanism to contain rising inflation rates. Supavuth pointed out that the average inflation rate in Thailand is higher than that of its 21 neighboring countries and trading partners.

So, it is likely that the BOT will allow the baht to appreciate in the same direction with other regional currencies, although exports will be affected to a certain extent.

Should the BOT be able to keep the inflation rate at an appropriate level, he said, it would not need to raise its interest rates so high. He said foreign capital inflow into the country, particularly for the Stock Exchange of Thailand (SET) is another reason behind the strengthening of the Thai baht. It is likely that foreign investors will soon take profits from their capital gains in the stock market.

On an economic trend this year, he said, Phatra Securities believed the country’s economy would grow 4.5 percent, boosted by higher exports in the second half of this year. Should the exports not expand as predicted, he said, the Thai economy will not reach its target growth.

Additionally, more people may opt to reduce spending and turn to saving money, which will lead to a decline in consumption. (TNA)


Gasoline prices likely to surge to Bt30 per liter

The price of premium gasoline on the domestic market is likely to surge to 30 baht per liter if global oil prices continue to skyrocket, according to an industry executive.

Anusorn Sangnimnuan, president of Bangchak Petroleum Public Company Limited (Bangchak), said that the current price of premium gasoline is at 28.34 baht per liter after all oil traders, except PTT Public Company Limited (PTT), decided to increase the retail price by 0.40 baht last Wednesday. However, the marketing margin remains in deficit.

Should oil traders set the margin to reflect their actual costs at 1.50 baht per liter, premium gasoline prices would definitely exceed 30 baht per liter, Anusorn noted.

Anusorn stated that whether or not fuel prices would be raised further would depend on the decision made by major oil traders.

He conceded that global oil prices had continued to increase due to concerns regarding the tension between the United States and Iran and its nuclear program, as well as unrest in Nigeria. Such unfavorable incidents are leading to fears that fuel production could decline.

It is also projected that global crude oil prices would continue to increase throughout this year, particularly in the September-November period of every year when fuel production capacity often drops, as natural disasters, such as Hurricanes, normally occur, he said. (TNA)


Foreign investors pass on ‘small potatoes’ motorway projects

Foreign investors have paid no attention to investing in the construction of two new Thai government motorway projects worth Bt60 billion (US$1.5 billion) because the total required investment is too small to interest them, according to the Transport and Traffic Policy and Planning Office.

The office’s director-general, Maitree Srinarawat, said that Thailand’s construction of additional motorways is part of a number of state-initiated mega-infrastructure projects under the supervision of the Highways Department.

Maitree said the government may need to implement the project by itself, however, because foreign investors have shown no interest in investing so far.

Not one foreign investor has asked for more information on investing in construction of the proposed motorways linking Bangkok to northeastern Nakhon Ratchasima Province and Cha-um in the upper-southern Petchaburi Province since information on the project was released.

He said he thought that foreign investors were indifferent to the project because they believe that construction of roads do not rely on high technology.

Many also believe that Thailand has the means to undertake the project itself since it does not require the same high level of investment as electric train projects, he said.

Regarding progress on the proposed investment in the construction of 10 electric train mass transit routes, Maitree said many potential foreign investors had sought information on the projects through a website, despite uncertainty about the country’s political situation. (TNA)



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