Thai-Vietnam Talks Highlight Dramatic Shift In Rice Market
Originally posted on Wall Street Journal
Agricultural leaders in Thailand, the world’s biggest rice exporter, are asking Vietnamese counterparts to help them stabilize the tumbling price of rice — the latest indication of how dramatically circumstances have changed since food riots gripped the developing world a few months ago.
Industry experts aren’t expecting any major price-fixing accords between the two countries, which together control roughly 45% of global rice exports. A Thai participant in the meetings, held with industry representatives in Vietnam this week, stressed the two countries are only speaking in general terms about how to keep prices from falling further from their current levels.
But he said the two sides hoped to announce some form of increased coordination at an upcoming summit of heads of state from the Association of Southeast Asian Nations later this month in Thailand. One idea already on the table is the creation of a regional rice reserve that could be used to prevent food shortages and absorb excess stocks during periods of oversupply, analysts say.
“We have to stabilize the world price,” said the participant, Chookiat Ophaswongse, president of the Thai Rice Exporters Association. If not, “it’s going to hurt the overall market.”
It was only a few months ago that residents in poor countries were launching violent street demonstrations to protest the soaring price of rice and other key foodstuffs. Since then, grains prices have fallen about 30% from their peaks in midyear 2008, according to the Food and Agriculture Organization of the United Nations. The price of Thai rice, a global benchmark, has dropped to about $600 per ton from nearly $1000 last May.