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 Agriculture
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16 Nov 06 18:52
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Thailand, Vietnam sign MoU on rice; Thai traders see benefits
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TNA
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BANGKOK, Nov 16 - Major rice exporters Thailand and Vietnam signed a memorandum of understanding Thursday on exchanging information on rice and daily price levels with the intention to prevent price cutting practices previously used by rice dealers, a senior commerce ministry official said.
Apiradi Tantraporn, director general of Thailand's Foreign Trade Department, said rice exporters of the two neighbouring countries signed the agreement 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.
Currently, the two countries have captured more than 50 per cent of rice exports to the global market--to the extent that they are able to dictate prices in the global market--but 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 rice prices from declining, Mrs. Apiradi said.
The move came after Vietnam, which was hit by a series of typhoons earlier this year, has 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, she said, to meet Vietnam's income goals as it must retain stocks for domestic consumption.
Rice price wars with Thailand mean that farmers, dealers, and the national economies alike suffer losses, she 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 as a first step on stabilising rice prices after Vietnam admitted that the natural disaster 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 should be able to export rice more as global demand for 2007 is estimated at between 28-30 million tons, he said, adding that this country should be able to export as much as 8.5 million tons of rice, up from 7.5 million tons projected earlier, and the country would earn more than Bt100 billion.
Besides that the two countries agreed to cooperate on preventing use of genetically modified rice, as required by the European Union, Mr. Chukiat said. (TNA)
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