Thai Politicians Learn Markets Anticipate

It'd be a man bite story if it weren't for how insane the idea was to begin with (Time):

The plan was simple: Thailand’s government would buy rice from local farmers at a generous price, some 50 percent above the market rates. It would hold the rice in warehouses, cutting off exports to the rest of the world. The sudden shortage from the world’s heavyweight champion of rice exports would cause a spike in global prices. Then, payday for the government as it swung open the warehouse doors and sold its stockpile to the world at a premium. Farmers win, the government wins, foreign consumers lose, but then they don’t vote in Thai elections, so what do they matter? The plan was a political no-brainer, except for one problem: Thailand’s government underestimated how quickly the market can kick back at any would-be puppeteers.

[...] And it was Thailand’s great misfortune that exactly one week after it slashed exports, India lifted its export ban, flooding the market with 10 millions tons of rice. Rather than orchestrate a price hike, Thailand helplessly stood by as global prices sank.

David Dawe, a senior economist with the U.N.’s Food and Agriculture Organization, can look at a spreadsheet of historic rice prices and see a roller coaster of emotions. He points to June 2011, when the current Thai administration was campaigning on its rice plan. Even before the election, rice traders had anticipated the coming shortage and bid up the price. “You’ve got this big bump of $100 a ton,” says Dawe. “Thais were probably pretty happy at that point, thinking, ‘Okay not too bad, we can probably drive them even higher.’” Then, in September of 2011, shortly after Prime Minister Yingluck Shinawatra’s administration was swept into office on a wave of votes from the farming sector, India opened the floodgates. Dawe points to this moment and says, “Reality sets in. The Vietnamese started lowering their prices and the Thais just got left behind.” Over the next year, Thailand was knocked from its perch as the world’s top exporter of rice, tumbling behind India and landing just short of Vietnam.