Thailand is poised to become a global rice-trading hub in the near future after Asean countries threw their support behind the concept to stabilise market prices.During the Asean Economic Ministers Meeting in Hanoi last month, rice-exporting nations Burma, Cambodia, Laos and Vietnam supported the idea of establishing the trading centre in Thailand.
The centre will facilitate cooperation under Asean to strengthen its bargaining power in exporting rice to the global market.
Commerce Minister Porntiva Nakasai said that as major rice producers, those four countries shared the same views as Thailand, saying that cooperation was an important mechanism to stabilise rice prices. In addition, the centre will focus on the region's rice stock to maintain food security.
"Those countries supported Thailand to set up the centre to focus on future development of rice exports as well as creating an export hub for both the region and the world," Porntiva said.
She said the ministry would ask the Thai Rice Exporters Association to work with concerned agencies in Thailand and neighbouring countries to proceed with the idea.
"We should take this on urgently in a bid to ensure price stability and eliminate price-cutting practices," she said.
Sompong Kittilienglarp, president of Ponglarp, a leading rice exporter, said domestic rice prices dropped slightly, by Bt100-Bt200 per tonne, last week. This occurred after exporters that were allocated 1 million tonnes of the government's rice stock had rushed to release their stocks.
"They did that out of fear the government would release more of its stockpile and it would pull down market prices," he said.
However, Sompong said local rice prices should not drop as demand was still high, particularly for the export market. Moreover, recent floods have damaged rice plantations countrywide.
Ponglarp's demand for rice was affected as the Commerce Ministry's Foreign Trade Department approved sale of 200,000 tonnes of rice to the company instead of the 500,000 tonnes it requested. The company's offered price was Bt12,000 per tonne. The department said other exporters had also offered to purchase rice but at a higher price than Ponglarp's.
"We have to sign a contract with the Public Warehouse Organisation [today]. If the organisation is reluctant to sell rice to us, we're ready to cancel the contract to prevent any legal action moving rice from the warehouse," Sompong said.
Ponglarp also plans to purchase 300,000 tonnes of rice if the ministry opens sales to exporters again.
Sompong said there was no reason to fear such a move would pull down prices, as there was a supply shortage and high demand.
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