(VOV) - Thailand has proposed establishing an
ASEAN Rice Exporters Alliance that consists of Vietnam, Thailand, Laos,
Cambodia and Myanmar with the aim of increasing rice export prices.
However, the proposal is facing
some opposition from rice-importing countries and even in Vietnam, there are
differing opinions on whether the country will benefit from joining the
Alliance.
The aim of the Alliance taking
shape at the end of this year is to help sharpen the competitive edge of ASEAN
rice, promote information sharing and cooperation in production and marketing,
and stabilize rice prices in the five countries.
The five previously mentioned
ASEAN nations annually export a total of 20 million tonnes of rice, accounting
for two thirds of global rice exports.
The International Grain Council
(IGC) says that despite controlling nearly half of the global rice export
volume, Vietnam and Thailand’s total share of the rice market will shrink to 38
percent later this year when India surpasses them to become the world's biggest
rice exporter.
Establishing the ASEAN Rice
Exporters Alliance is a response to the sharp increase in India’s rice market
share after the country lifted its ban on exporting regular rice in September last year.
As the world’s biggest rice
exporter, Thailand has been carrying out a costly meal replacement programme
after the government decided to buy rice from farmers at a price higher than it
is on the market.
Currently, Thailand has up to 16
million tonnes of rice in stock but it is still reluctant to trade for fear of
inflated prices.
Vietnamese rice has gone down in
price since early this year in the face of tough competition from cheap Indian
rice.
The Deputy Head of the Vietnam
Agriculture Institute, Professor Dr Bui Chi Buu, says that as the second most
populous country in the world, India stores a large volume of rice.
To maintain its temporary
stockpiles, India has to sell the old rice in stock to make room for the newly
harvested rice.
By far this year, India has
traded just 30 million tonnes out of its more than 40 million tonnes of rice in
stock.
The global rice market has
experienced wild fluctuations following India’s decision to sell 20 million
tonnes of stockpiled rice at low prices.
Vietnam has no such stockpiles of
rice for export since its rice is not highly graded in the world. Most of its
customers are mainly low-income nations, which puts the country at a
disadvantage to compete with cheaper rice from India.
In addition, experts say Myanmar
will present the biggest challenge for Vietnam in the near future as it
annually produces 13-14 million tonnes of rice and its government is trying to
gain a leg up on the regional export market.
Some claim the Myanmar Rice and
Paddy Traders Association (MRPTA) are working on export management programmes
to help drive up rice prices despite the fact it is only capable of producing
rice of the same quality compared to Vietnamese rice.
So, in order to boost Vietnam’s
rice exports and help farmers make a profit, Vietnam needs to join the ASEAN
Rice Exporters’ Alliance to avoid unfair competition through reciprocal market
concessions.
The Vietnamese Government knows
too well that only by helping farmers earn higher incomes and stabilize their
lives can it achieve the goal of rice production and export in a sustainable
manner.
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