The world’s biggest rice exporters, Thailand and Vietnam, on November 16 agreed to exchange information on rice stocks and daily prices in order to bring benefits to both, especially their farmers.
The agreement was reached at the meeting which took place on the sidelines of the 18th APEC Ministerial Meeting (AMM-18) yesterday in Hanoi and discussed trade cooperation between the two South East Asian countries, particularly rice exports.
Cooperation between the two sides aims at avoiding price-cutting and protecting both nations from foreign buyers pushing down prices.
During their meeting, representatives of the Vietnam Food Association and the Rice Exporters Association of Thailand signed the Memorandum of Understanding to cooperate on exchanging information – including rice price monitoring – on a daily basis.
The agreement will allow both sides to manage and control rice stocks properly.
Thailand and Vietnam account for more than half of all the rice traded in the world market today.
However, private exporters in both countries have engaged in cutthroat competition against each other by reducing prices unrealistically in a bid to sell rice to foreign importers.
From now on, rice exporters in the two countries will discuss first with the objective of preventing a decline in rice prices.
The new cooperation program came after Vietnam, which was hit by a series of typhoons earlier this year, suffered sharp production losses and is now able to export only about 15 per cent of its total rice production before the end of February 2007 – which is too little to meet Vietnam's income goals as it must retain stocks for domestic consumption.
Rice price wars with Thailand meant farmers, dealers, and both national economies alike suffer losses, Apiradi Tantraporn, director-general of the Foreign Trade Department, explained.
The shortfall in Vietnam means a windfall for Thai exporters, as it is a good opportunity for Thailand to reduce its rice stocks as well as sell newly harvested rice.
Chukiat Opaswong, chairman of the Thai Rice Exporters Association, said the MoU is considered a first step on stabilizing rice prices after Vietnam admitted the natural disasters in its country would allow it to export only about 4.8 million tons of rice this year.
The impact will continue until 2007 as Hanoi forecasts that its rice exports throughout the year would decline to around 4.5 million tons, said Mr. Chukiat.
Thailand, Vietnam’s seventh largest trading partner, should be able to export as much as 8.5 million tons of rice, up from 7.5 million tons projected earlier and 3.5 million tons higher than Vietnam’s target.
Besides that the two countries agreed to cooperate on preventing the use of genetically modified rice, as required by the European Union, Chukiat said.
Vietnam & World Economy
Vietnamese
