Business

Smugged Rice Being Sold into the Thai Intervention Scheme

Smuggling of rice appears to be rampant.

CHIANG RAI – Hidden in 18-wheeler trucks, carts and pick-up vans, hundreds of thousands of tonnes of rice are being smuggled from Lao, Cambodia and Myanmar into Thailand, although the country holds enough stocks to meet half the world’s annual trade in the commodity.

A populist program to support prices has led to the Thai government paying its farmers almost double prevailing prices in Cambodia and Myanmar. Farmers and traders in the neighboring countries are trying to take advantage, sending their grain across the border to be sold into the Thai intervention scheme.

The equivalent of 750,000 tonnes of milled rice is being smuggled into Thailand a year, mainly from Cambodia and Myanmar, according to estimates of analysts and traders who have studied the illicit shipments.

“No one can differentiate which one is Thai rice and which one is Cambodian rice. That makes it easy to smuggle rice in and make a profit by selling it to the government,” said Kiattisak Kalayasirivat, managing director at Thai trader Novel Agritrade.

The extent of the smuggling adds to a headache for Thai Prime Minister Yingluck Shinawatra, who increased the support price for un-milled rice to 15,000 baht ($480) per tonne after she took power in 2011, to please her farmer vote-bank.

Yingluck’s support base is mostly in rural districts, and her government mistakenly bet that Thailand could corner the world rice market by building up stocks.

Instead, the government, already running a budget deficit of 300 billion baht ($9.59 billion) this fiscal year, is struggling to fund the multi billion-dollar program and find buyers for the grain. Ratings agency Moody’s warned in June that “populist measures” were a risk to financial discipline.

The government said last month that losses from the scheme amounted to $4.4 billion in the crop year that ended in September 2012.

Thailand now sits on rice stockpiles of 18 million tonnes, almost double a normal year’s exports and nearly half of annual global trade of 38 million.

It is mostly holding on to the stocks since it will make a huge loss if the rice is sold. The intervention price of $480 per tonne of un-milled rice translates to $750 a tonne for milled rice. Milled rice is quoted around $475 a tonne in Thailand’s open market and around $400 a tonne in Vietnam, traders said.

From No. 1, Thailand has dropped to the world’s No. 3 rice exporter behind India and Vietnam.

The quality of the rice in its warehouses has also dropped because most of the smuggled grain is broken rice, which is then blended with full-grain Thai rice.

Because of that, the spread between 5 percent and 100 percent broken rice available in Thailand has narrowed to just $30 a tonne currently from $60 a tonne in June last year and $85 in 2011. “The spread has tightened up very dramatically,” said Ben Savage, managing director of London-based Jackson Son and Co, a rice broker since 1860.

CAT RUNNING AFTER A MOUSE

Thailand’s porous border with Cambodia, to the east, has no natural barriers like rivers and villagers easily cross between the two countries. Smuggling of rice appears to be rampant.

“As long as our prices are high and they can make a profit, we won’t stop them,” Pakkarathorn Teainchai, the governor of Sa Kaeo province on the border with Cambodia, told Reuters. “It’s like a cat running after a mouse,”

“Recently we confiscated 60 tonnes of rice. There’s bound to be more that we can’t prevent.”

Noppadol Thetprasit, head of a customs post in the Aranyaprathet district of Sa Kaeo, said he recently intercepted 30 tonnes of rice being smuggled from Cambodia, but he knows more must be getting through at smaller crossing points that lack his facilities.

“The rice is being carried into Thailand on villagers’ small carts, and is then reloaded onto bigger trucks and moved on to other provinces in Thailand to be resold,” Noppadol said.

The smuggling is happening on a far bigger scale than the talk of villagers and carts would suggest. Thai officials say some smugglers use 18-wheel trucks to bring rice into the country.

Small-scale smuggling had occurred previously but volumes have jumped with the advent of the high intervention price.

The International Grains Council in London estimated the equivalent of 750,000 tonnes of milled rice a year was coming into Thailand, senior economist Darren Cooper said. That would be about 900,000 tonnes of unmilled rice, or paddy.

“Clearly shipments (to Thailand) started going up since the intervention scheme started,” Cooper said. “It is highly attractive for the neighboring countries to try and get as much rice across to Thailand as possible and supply into the scheme.”

The United States Department of Agriculture put Thai rice imports at 600,000 tonnes a year in the first two years of the scheme, jumping from 200,000 tonnes in 2010/11.

BLIND EYE

In Cambodia, the authorities turn a blind eye to the smuggling. Khung Vun, president of the Rice Millers Association in Banteay Meanchey province on the border, says customs and police officials will wave grain through as long as a general export permit can be produced.

In 2012, legal rice exports to all countries by Cambodia amounted to 205,717 tonnes, according to its official data.

Thon Virak, director of Cambodian state-owned rice exporter Green Trade, estimated up to 300,000 tonnes of paddy rice was smuggled into Thailand in 2012 and a similar amount in 2011.

“This year, the number will decline because crossing points have been closed,” he said in Phnom Penh, referring to stepped-up border policing on the Thai side.

In Myanmar, a shortage of good-quality mills restricts demand for legal exports and encourages smuggling out.

Aung Kyaw Htoo, agribusiness manager at cargo surveyor SGS in Yangon, estimated around 120,000 tonnes of rice was smuggled into Thailand in 2012, most of it lower-quality broken grain.

He said he understood the rice was sold into the intervention scheme, although other analysts said some of it could have been bought by noodle makers and feedstuff producers who, because of state buying, find Thai grain scarce or costly.

COMMERCE MINISTER SACKED

Thailand announced it would cut the intervention price to 12,000 baht per tonne last month, but reversed the decision on the day it took effect, giving in to farmers who had threatened protests.

Before rowing back on the cut, Yingluck sacked Commerce Minister Boonsong Teriyapirom, after public criticism that he had failed to be credible or transparent about the costs of the scheme.

New commerce minister Niwatthamrong Bunsongphaisan says the government will sell up to 1.5 million tonnes of rice a month for the rest of year through tenders and will also try to sell to other governments.

It is unclear how he will do that without offering grain at cut-rate prices to exporters or governments, and that may lead to charges of dumping. The United States and others have already sounded warning noises at the World Trade Organisation because of Thailand’s lack of transparency on sales and stocks. ($1 = 31.0150 Thai baht)

Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP