ASEAN states plan rice cartel

August 18, 2009

BANGKOK — Major ASEAN rice-producers Thailand, Viet Nam, Laos, Cambodia and Myanmar plan to form an association to create a sustainable system for trading and production.

The plan was unveiled yesterday following Cambodian leader Hun Sen’s initiative at the ASEAN Summit in Cha-am in late February. It focuses on price stabilisation, food security in the region and rice development. It aims for price stability next year.

It comprises the five countries of the Ayeyawady-Chao Praya-Mekong Economic Cooperation Strategy (Acmecs) and will set up an Acmecs Rice Traders Association.

Thailand, Laos and Cambodia have agreed in principle and plan talks with Cambodia and Myanmar during the ASEAN Economic Ministers Meeting, which ends today.

For some years Thailand and Viet Nam have co-operated to curb price-cutting in the export market through data exchange.

Price cutting
A Thai source close to the negotiations said they solved Thailand’s major problem on circumvention by neighbouring countries, diluted price-cutting in the region and stabilised prices.

"It will create a supply chain in the region which will strengthen bargaining power in the world market," the source said.

Chaiya Yimvilai, adviser to the commerce minister, said yesterday that Laos proposed Thailand and Viet Nam draw up the plan.

Thailand and Viet Nam are white-rice producers while Laos focuses on sticky rice. Laos has approached Thailand as a partner in a joint venture with Kuwait to grow rice in Laos. The Lao government has allocated 200,000ha.

Laos has 2 million ha set aside for rice, but only 900,000 are actually under the crop.

Meanwhile, the ASEAN-Australia and New Zealand Free Trade Agreement comes into force on January 1.

Australia and New Zealand are important trade partners of ASEAN, with bilateral trade in 2008 valued at US$67.2 billion. They were the seventh largest export market of Asean.

ASEAN exports to Australia and New Zealand reached nearly $44 billion last year. Major goods were fuel, machinery, automobiles, gold and electrical appliances.

Chaiya said Thailand and Australia would increase trade in services under the Thailand-Australia Free Trade Agreement. Australia wants to see more business-to-business trade. — THE NATION/VNS