Alternative market listed rice company’s shares surge as Thai government prepares to auction off stockpiles

THAILAND: The value of shares for Thai Ha Pcl (KASET)  –  a Market for Alternative Investment (MAI) listed company producing and exporting Kaset Brand rice – skyrocketed on Friday (July 22) by nearly 30%, reaching a single-trading-day ceiling price of B3.24 per share.

Shares for KASET reached an 8-month high, surging nearly 30 per cent in the course of a single trading session. Graph generated by bidschart.com
Shares for KASET reached an 8-month high, surging nearly 30 per cent through the course of a single trading day. Graph generated by bidschart.com

The stock, which had closed on July 21 at B2.50 per share, opened at the July 22 morning bell at B2.54 per share, and over the course of the morning and afternoon sessions spiked nearly 30 per cent, reaching its ceiling by 3pm, when further trading of the stock was halted for the day.

Friday’s ceiling price represents an 8-month high for Kaset shares. 

The reason for the surge was not immediately clear.

In related news, the Thai government is preparing to auction off more than 1.6 tonnes of its rice reserves to the private sector at the end of July, and is in the process of validating credentials of dozens of bidders.

The initial auction is part of the Thai government’s immediate plans to release about 3.7 tonnes of its reserves into circulation; in addition to the initial 1.6 tonnes to be auctioned to domestic traders between July 25 and 28, an additional 2.1 tonnes is set to be auctioned to exporters in the final two quarters of the year.

Thailand reportedly is sitting on some 11.5 million tonnes (MT) of rice in its stockpiles, a bulk of which is widely reported as “substandard”.

Old Thai white rice for export is reportedly trading at US$360 per tonne, while new white rice is going for about $420 per tonne .

According to quotes published by the USDA rice outlook, Grade B Thai rice was valued at $432 per tonne in July 2016, up about 9% year-on-year (y-o-y) from $396 in July 2015.

As of July 2016, the USDA forecasts Thailand to export a total of 9.8 MT of rice this year, 800,000 more tonnes than it expects India to export, and 2.8 MT more than Vietnam.

However, the Thai rice exporters association reportedly only expects to export about 9.2 MT of the staple grain this year, about 300,000 tonnes less than its previous forecast.

Though the USDA forecasts Thailand to be the world’s leading exporter of rice this year, its July 2016 outlook positions the kingdom as the world’s sixth leading producer with total yields expected to be 15,800 MT, a y-o-y slump of more than 15%.

This is compared to expected yields of 145,770 MT in China (which would equal a y-o-y increase of 0.8%); 103,500 MT in India  (- 1.8% y-o-y); 35,300 MT in Indonesia (- 0.7%); 34,500 MT in Bangladesh (no change) and 28,100 MT in Vietnam (- 0.2%).

Thailand’s reduced yields are widely cited to be the result of adverse climate factors, including drought and flooding. 

See also, Thai-language news reports about upcoming auctions, here, here and here.

Also, this Reuter’s report on Thailand’s current rice situation offers good insight here

Also worth a read is this take on why El Nino may actually be good for the Thai economy in the short term.

 

   

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