BUSINESS 
HEADLINES [click on headline to view story]: 

Labor Minister to establish fund for unemployed workers

Inflation rate reaches 5.9% in January

SEC rules premier’s children do not violate insider-trading code

Government E-auctions intended to curb collusion by bidders

US agrees to open fruit market for Thai exporters

Thai exporters urged to accelerate upgrading product quality

Government releases rice stock to support Thai exporters

Private bus operators given green light for new fare rise

Labor Minister to establish fund for unemployed workers

Thailand’s Minister of Labor promised workers demonstrating in front of his ministry that he would set up a fund to give financial help to unemployed workers.
More than 100 unemployed workers, mainly women over 40 years old, gathered in front of the Labor Ministry, demanding that the Social Security Law Article 39 be amended since it requires unemployed workers registered with the Social Security Fund to continue to contribute to the fund, even while they are unemployed.
The demonstrators also asked the Social Security Office to apply profits from the fund to create jobs and grant interest-free loans for unemployed workers.
Another group of demonstrators also gathered at the ministry last Wednesday - some 200 members of the workers’ union of Saint-Gobain Sekurit (Thailand) Co. Ltd., an automotive glass supplier in the eastern seaboard industrial estate province of Rayong, who have been in a lengthy dispute with their employer.
The workers petitioned the Labor Ministry to negotiate with the employer to increase their wages, bonuses, and other social welfare perks since they failed to convince the company to do so despite 16 rounds of talks. The union leaders vowed to increase pressure on the ministry until their demands are met.
Labor Minister Somsak Thepsuthin promised the unemployed demonstrators he would ask the Social Security Office to consider setting up a fund to provide loans for them and give them a vocational and foreign language-training course.
Meanwhile, he asked the Saint-Gobain Sekurit union members to be patient and to continue waiting until their talks have satisfied all legal processes. Somsak told the demonstrating workers that they could gather or sleep in front of the Labor Ministry but asked them not to join the anti-government rally led by media mogul Sondhi Limthongkul. (TNA)


Inflation rate reaches 5.9% in January

Thailand’s inflation rate in January stayed at 5.9 percent, up 0.2 percent from that of December, pressed by surging fuel prices, according to the Commerce Ministry.
Permanent Secretary for Commerce Karun Kittisataporn said that the inflation rate rose moderately along with the oil price surge.
However, he believes the rate would stay at around 5.6-5.7 percent in the first quarter of this year since the ministry is attempting to supervise consumer product prices to ensure they stay at a fair level and volume to make sure it meets people’s demands.
The ministry projects that the increase in city bus fares will fuel the inflation rate by 0.2 percent. He views that prices of other products will not edge up considerably because fuel prices will not be so volatile.
“As far as we can estimate, the inflation rate for the whole year will stay at around 3.5-4.5% on the assumption that the gross domestic product (GDP) grows at 5-5.5%, the Thai baht stays at 41 to the US dollar, the central bank’s repurchase rate is at 4.5%, the crude oil price in Dubai at US$60-65 per barrel, and minimum wages range between 175 and 184 baht.
“In our view, fuel prices will have the most adverse effect on the inflation rate. However, we project that oil prices will not be volatile this year so the inflation rate won’t rise considerably,” said Karun. (TNA)


SEC rules premier’s children do not violate insider-trading code

The Securities and Exchange Commission (SEC) recently ruled that Panthongtae and Pinthongta Shinawatra, son and daughter of Prime Minister Thaksin, had not violated an insider trading code in their sale of a major stake in Shin Corporation Public Company Limited to Singapore’s state-owned Temasek Holdings last week.
“The regulator concluded that Ample Rich Investments sold Shin shares to Panthongtae and Pinthongta at one baht each. Both parties own shares in the company and bought them from themselves. They have not taken advantage of anybody,” said SEC’s Secretary-General Thirachai Phuvanatnaranubala.
“Had they bought shares from other people without full disclosure, it could have fallen under Article 241 on insider trading, but in this case, they are not doing that,” he noted.
However, he said, the SEC is looking into an allegation that Panthongtae and Pinthongta should have made a tender offer on part of the sale of the shares if they had held more than 25 percent of the shares in a particular period. He also affirmed that the SEC has not yet received information disclosure on changes in the shareholding structure in Ample Rich Investments from the premier’s children.
He said documents received by the SEC from persons involved with the company on August 3, 1999 are not related to the change in the shareholders’ structure from 100 percent stake held by Panthongtae to 80 percent by him and 20 percent by his sister.
Thirachai pledged that the regulator would definitely prosecute if there were any wrongdoing. The SEC will treat this case using the same standards that they would with any other cases, he said. (TNA)


Government E-auctions intended to curb collusion by bidders

Computer electronics-aided auctioning for procurement plans of government agencies is believed to be able to help authorities curb, if not completely eliminate, behind-the-scenes price-setting or other collusion among bidders.
Comptroller General’s Department Director General Boonsak Jiampreecha said that the government’s so-called E-auction system will be applied to some 1,600 procurement projects, each with a minimum value of two million baht.
Though the E-auction system may not be able to completely eradicate hidden conspiracies among bidders, it will be able to deter and significantly reduce the frequency and cost to the state of such malpractices in the future.
Businesses learn of upcoming auctions by visiting government websites, Boonsak said, and the E-auction process itself consumes only 30 to 60 minutes. A few minutes before bids close, bidders are asked to quote their most competitive prices, said the chief of the Comptroller General’s Department. During the bidding process, bidders are prohibited from communicating with one another, though they may send representatives as observers. Neither the name of winning bidders nor the winning price quotations will be disclosed to the public.
The chief of the government unit which runs the procurement project will act as head of the bidding committee while an outsider will be invited to join as a member of the committee. (TNA)


US agrees to open fruit market for Thai exporters

The United States has agreed to open its market for Thai radiated fruits, making Thailand the first country to win access to the immense Northern American market, according to Agriculture and Cooperatives Minister Khunying Sudarat Keyuraphan.

Agriculture and Cooperatives Minister Sudarat Keyuraphan

Last Tuesday, US and Thai agriculture authorities signed a memorandum of understanding (MOU) for an operational framework of reciprocal practices in safe radiation covering bilateral trade of radiated fruits, said Khunying Sudarat. Under the MOU, Thailand is allowed to initially export six radiated fruits to the US market. These fruits are mango, mangosteen, lychees, longan, rambutan and pineapple.
“Thailand is the first trading partner the US has opened its market for radiated fruit exports, as Washington has recognized the standardized safety of the Thai radiation process on food products. This is beneficial to Thai fruit exporters as they can earn up to Bt100 billion annually from their shipments to the huge US market, which is linked to Canada based on the Northern American Free Trade Agreement (NAFTA),” the minister told journalists after witnessing the signing of the MOU.
“Thailand is likely to begin exporting radiated fruits to the US market by September this year,” she added. Thailand will later ship more radiated fruits to the US market, including papaya and coconut.
Khunying Sudarat said Thailand’s Office of Atomic Energy for Peace (OAEP) can currently provide the country’s fruit radiation service at the capacity of 20 tons per day.
When demand for the Thai radiated fruits considerably increases, the ministry may invite private firms to provide the same standardized service of the OAEP, instead of having the government make large investments, she noted.
Washington believes that standardized radiation is the safest method for people to consume pest-free fruits, according to Alan S. Green, director of the US hygienic crop program, who signed the MOU with the Thai authorities.
“There is now increasing demand for tropical fruits on the US and Canadian markets,” he said. “Washington hopes Thailand will also open the market for US radiated fruits in the future,” he added. (TNA)


Thai exporters urged to accelerate upgrading product quality

Deputy Prime Minister and Commerce Minister Somkid Jatusripitak urged Thai exporters not to worry about the strengthening Thai baht, saying that they should instead give priority to upgrading the quality of their products.
He said the recent appreciation of the local currency was not cause to worry because the government is encouraging Thai entrepreneurs to produce products whose quality meets market recognition.
Regardless of whether the Thai baht is weak or strong, Thai products could still be sold on the market at an attractive price if the quality is recognized.
“Japan is a model country where the currency value is no longer a matter of concern. For instance, Japan’s melons tastes very good. People here are willing to buy them regardless of how weak or strong the yen is.
“Thai exporters must try to develop their products like those of Japan, instead of selling them in large amounts and gaining small profit margins for each item,” he said.
Dr. Somkid added that China has attempted to replicate what Japan has done. If successful, China would become a remarkable rival because its product prices are already competitive, he said.
Chantra Purnariksha, director-general of the Department of Export Promotion, said that both the commerce minister and Bank of Thailand (BOT)’s governor believe that the Thai baht will only remain strong in the short term. However, she said, it is necessary for parties concerned to closely monitor the economic policy of the United States following the replacement of the Federal Reserve chairman. She believes the overall picture of the local currency movement will become clear in February and March. (TNA)


Government releases rice stock to support Thai exporters

The government released more than 700,000 tons of rice in stock to support continuing Thai rice exports amid increased demand and prices on the world market.
Deputy Prime Minister and Commerce Minister Somkid Jatusripitak approved a plan in which Thai rice exporters were welcome to bid for a certain amount of rice for their shipments overseas, according to Director-General of the Department of Foreign Trade Rachane Potjanasuntorn.
“The move followed a shortage of rice supply in this year’s harvest amid rising demand and prices on the world market,” Rachane told journalists.
“With the plan, local rice exporters can fulfill their overseas orders without waiting for the next harvest,” he noted.
With the increased global demand, Rachane said, most of the Thai rice from this year’s harvest has been exported. Rice in the government stock include 5 percent, 15 percent and 25 percent white rice.
Bidding of the rice was made in US dollars based on the free on board (FOB) Bangkok price. Tenders were submitted at the Department of Foreign Trade in Nonthaburi Province on the outskirts of Bangkok on January 31. (TNA)


Private bus operators given green light for new fare rise

The Ministry of Transport has given the green light for private operators of both city and inter-province passenger buses to raise their fares due to continuing rising fuel costs.
Deputy Transport Minister Gen. Chainant Charoensiri told journalists that the ministry’s approval on the new bus fare rise was due to the fact that the price of diesel now exceeds Bt24.50 per liter.
“For the past six months, the Ministry of Transport has asked private bus operators to keep their fares unchanged, promising them that once domestic diesel prices reached Bt24.50 per liter, they would be allowed to raise their fares. Diesel price has now risen to Bt24.69 per liter, and the ministry must keep its promise,” he explained.
“Forcing private bus operators to keep their fares unchanged amid continuing fuel cost hikes may result in undesirable sub-standard services adversely affecting the passengers,” he cautioned.
With this new approval, private city bus operators of both air-conditioned and non-air-conditioned buses are allowed to raise their fares by Bt1.0, while inter-province buses are allowed a fare rise of Bt0.03 per kilometer. The new fare rise became effective February 6.
Whether or not there will be a fare raise for state run buses (Bangkok Mass Transit Authority (BMTA) and the Transport Company Limited) will depend on the decisions of their top executives.
Meanwhile, the inter-province private bus operators said they would consider whether the approved fare rise of Bt0.03 per kilometer is acceptable. Their earlier request was for Bt0.09 per kilometer, as their fuel costs now stand at Bt0.14-0.15 per kilometer. (TNA)