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Published on February 28, 2008

Thailand and Vietnam yesterday laid out joint rice-exporting strategies for marketing, bidding and balancing both export and domestic prices instead of continuing a price-cutting policy.

The agreement was reached after the fourth meeting under the Thailand-Vietnam Rice Cooperation held in Bangkok.

Chookiat Ophaswongse, president of the Rice Exporters Association, said the cooperation would focus on stabilising rice export prices. The two countries agreed to stop the practice of undercutting prices.

"Vietnam also committed to no longer concentrating on export volume. Instead it will focus on higher export prices," Chookiat said.

For instance, the countries will join hands to bid at a rice auction in the Philippines next month. It is one of the big deals of the season, as the country is demanding 550,000 tonnes of 25-per-cent white rice.

Vietnam said in yesterday's meeting that it did not want to sweep all lots, Chookiat said. The country will rely mainly on its export capability.

The two countries see the white-rice export price passing US$500 (Bt16,100) per tonne soon.

Thailand is the world's biggest rice exporter, shipping out 9.5 million tonnes last year, followed by Vietnam at 4.5 million tonnes. The two countries control half of world's rice trade, which totalled 28 million tonnes last year.

Chookiat said the collaboration would benefit both nations, not only their exporters but also consumers. If successful, farmers could expect to enjoy price stability.

Thailand's total paddy harvest is expected to increase by 0.9 per cent to 29.9 million tonnes this year, while Vietnam reported that it would face flat growth at 36.5 million tonnes.

Due to the supply shortage, the association has asked the Commerce Ministry to gradually release rice from its 2-million-tonne stockpile in 500,000-tonne lots.

Truong Thanh Phong, president of the Vietnam Food Association, said rice prices in his country were trending up due mainly to a domestic shortage and climate change.

The Vietnamese are trying to control rice prices to facilitate exports and local consumption in the long run.

"We're confident that our total exports will reach 4.5 million tonnes this year, which is lower than forecast early this year due to cold weather in the North," he said.

Vietnam is also suffering from soaring prices. For example, white rice is now being quoted at $475 per tonne, up $30 to $40 from last year. However, the country has not faced the problem of losses from filling export orders thanks to its government's rice development policy.

The two countries also vowed not to produce genetically modified rice nor conduct any field trials.

Petchanet Pratruankrai

The Nation