Five ASEAN members have agreed in principle to a proposal by Thailand to form the ASEAN Rice Federation, according to a statement from Myanmar’s Ministry of Commerce.
The statement on the ministry’s website was first reported by Oryza News on August 22.
Thailand, Vietnam, Cambodia, Myanmar and Laos are likely to sign an agreement to establish the federation later this year. The federation’s primary goals are to increase rice export prices by 10 percent each year and ensure food security in the region.
The five countries export a combined 20 million tonnes of rice annually – which accounts for nearly 70pc of total global exports.
Although Thailand’s permanent commerce secretary, Yanyong Phuangrach, believes that the price increase would not affect consumers, the Bangkok Post reported on August 24 that the president of the Thai Rice Exporters Association, Korbsook Iamsuri, is concerned about a conflict of interest among ASEAN members – particularly major buyers Indonesia and the Philippines.
Oryza News reported that Lourdes Adriano from the Asian Development Bank said that a rice cartel modelled on the Organisation of the Petroleum Exporting Countries (OPEC) would be unworkable in the long term because each of its members would compete to export the most.
“During his visit to Bangkok, President U Thein Sein agreed to in principle to joining the rice cartel, although how it will work in practice is yet to be finalised,” central executive committee member of the Myanmar Rice Federation and acting president of the Myanmar Farmers Association Dr U Soe Tun told The Myanmar Times.
He said that a 10pc annual price rise has the potential to create supply issues domestically.
“Thailand proposed forming a cartel because its domestic rice prices are rising and it wants to export larger volumes of rice. However if we raise prices here, demand for Myanmar’s rice may fall because its quality does not match that of other federation members. We need to consult farmers about whether a rice cartel is in the national interest. If the negatives are perceived to outweigh the benefits, we will bring this up with the government,” he added.
(Source : Myanmar Times)