Thailand,Vietnam OK rice pool to equalize export prices
BANGKOK - Thailand and Vietnam agreed to set up a "rice pool" to allow the two countries to export rice at
the same price, president of Thailand's state-run Public Warehouse Organization Niphond Wongtra-ngan said Thursday.
The idea to create the pool for exports is aimed at preventing competitive price cutting between Thailand and Vietnam, the
world's two largest rice exporters.
Niphond visited Vietnam July 5-7. During the visit, he met with the Vietnam Food Association and Vietnam's Export, Import
Department at the Ministry of Trade to finalize the rice pool project.
"Each of the two countries agreed to initially allocate 100,000 metric tons of 25% broken rice to the pool and sell that rice at
the same price. The two countries will sell on a 50-50 basis," Niphond said.
He said Thailand will allocate rice that the PWO and the Marketing Organization for Farmers bought under the domestic
intervention program while Vietnam will allocate rice it received from export companies that are the members of the association.
Niphond said sales will be on a cost and freight basis since the rice will be kept separately in each country. Buyers wanting rice
from the pool will have to accept Thai or Vietnam origin. He said the quality of Vietnamese 25% broken rice is at the same
level as its Thai equivalent.
"We agreed to give 30 days to experiment with the program to see whether it works...If it works, we will expand the pool to
have more rice to sell," Niphond said.
Niphond expects the PWO and Vietnam Food Association to sign an agreement on this rice pool project in mid-July, after the
Thai government's Rice Policy Committee and the Vietnamese rice minister approve the program, Niphond said.
The project will benefit both countries, Niphond said. Vietnam will be able to sell rice for more than its current selling price and
Thailand won't be asked by brokers and importers to lower selling prices in order to compete with Vietnam, he said.
The two countries also agreed to exchange rice trading information including updated export figures, domestic and export
prices, and supply and buying orders every Thursday.
Thailand, the world's largest rice exporter, aims to export around 6 million tons this year. Vietnam, the second largest, expects
to export around 4.3 million tons of rice in 2000.
Group Of Export Countries Mulled
Thailand also plans to persuade other major rice exporting countries including China, Pakistan, India and Myanmar to establish
a group to increase the bargaining power of rice exporters in the world market, Niphond said.
"I plan to visit China to persuade the country to join in the rice pool project...If China is ready for the talks, I will go to China
(this month)," Niphond said.
Niphond said Myanmar, also known as Burma, is also interested in the rice cooperation between Thailand and Vietnam.
Myanmar's ministry of trade has informed Thailand that it wants to talk with Thailand on the same cooperation.
Myanmar exports around 200,000-300,000 tons of rice a year.
Niphond said he is considering establishing the Organization of Rice Exporting Countries or OREC. "The cooperation between
rice exporting countries could be introduced in the form of OREC. The OPEC-like cooperation would initially have members
exchanging rice trade information," later expanding to a larger scope of cooperation, Niphond said, referring to the Organization
of Petroleum Exporting Countries.
Dow Jones - July 6, 2000.
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