Prayut eyes rice hike plan with Vietnam

Prayut eyes rice hike plan with Vietnam

Critics say it may backfire, profit rivals

A man loads a sack of rice onto a truck at a rice plant in the central province of Chai Nat. (File photo: Reuters)
A man loads a sack of rice onto a truck at a rice plant in the central province of Chai Nat. (File photo: Reuters)

Thailand and Vietnam are looking into the possibility of working together to raise rice prices to increase their bargaining power in the global market, government spokesman Thanakorn Wangboonkongchana said.

Vietnam's Deputy Agriculture and Rural Development Minister Tran Thanh Nam met with officials from the Ministry of Agriculture and Cooperatives to discuss a framework for cooperation on Thursday.

They discussed a range of issues including promoting food security to increase the value of agricultural produce and empowering agricultural cooperatives in both countries, Mr Thanakorn said.

Thailand has been recognised for agricultural cooperatives and its One Tambon One Product (Otop) products, and Vietnam will send its officials on study trips to the cooperatives in Thailand, he added.

Other topics included supporting farmers to use specialised equipment instead of manpower, training farmers and cooperation on sanitary and phytosanitary, the spokesman said.

Mr Thanakorn said the discussion was intended for the two major rice exporters to raise rice prices to increase farmers' income and boost their bargaining power in the global market after more than 20 years of low prices.

Thailand also asked Vietnam to support the establishment of the Asean Rubber Council to boost cooperation and support the rubber industry.

Moreover, Vietnam has been asked to expedite permission for the import of mangos and rambutan from Thailand as agreed to by both countries in 2016, as well as the import of chicks and eggs from Thailand.

The two sides agreed the matters would be discussed further at a meeting on sanitary and phytosanitary, Mr Thanakorn said.

They also mulled increasing cooperation on agricultural logistics to ensure the safe transportation of perishable products on land and by sea between Thailand, Laos and Vietnam to China and other countries, Mr Thanakorn said.

He added that Prime Minister Prayut Chan-o-cha instructed related agencies to step up efforts to boost Thai rice exports.

As the Covid-19 pandemic eases, Thailand's rice exports are benefiting from a resurgence in global demand and the weakening of the baht also makes their price more competitive, the spokesman said.

Mr Thanakorn said the government has urged people to attend the Thaifex-Anuga Asia 2022 "The Hybrid Edition", touted as Asia's largest food and beverage trade show.

The trade fair at Impact Muang Thong Thani ends on Saturday and aims to build confidence in, and reinforce the potential of, Thailand as a world hub for high-quality agricultural products and food. 

Alongkorn Ponlaboot, adviser to the Agriculture and Cooperatives Minister, said rice prices in the global market have been low at around US$300-400 (10,240-13,650 baht) per tonne for more than 20 years while production costs have continued to rise.

If Thailand and Vietnam, the world's major rice exporters, work together to raise rice prices, they would have more bargaining power to control the global rice trade and their rice farmers would earn more income, Mr Alongkorn said.

Chookiat Ophaswongse, an honourary president of the Thai Rice Exporters Association, disagreed, saying rice exports are free trade involving global competition and no one should try to fix the prices.

Rice is a perishable product that cannot be kept for long, potentially entailing hefty storage costs, he said. Over time its price will decline and this is one of the limitations on any move to push for higher prices.

India is another major rice exporter of over 20 million tonnes per year, compared to 6 million tonnes each from Thailand and Vietnam.

"If Thailand and Vietnam jointly raise their rice prices, what would happen if other countries opt to buy rice from India and other rice exporters such as Cambodia, Myanmar and Pakistan?" Mr Chookiat said.

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