Special Report: Thai Rice Exports Part 2

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The planned formation of the ASEAN Economic Community (AEC) in 2015 has sparked growing concern among local traders that Thai rice exports will lose market shares to Vietnam. The private sector is, therefore, proposing solutions such as importing rice from neighbors similarly to what Vietnam is doing. 

Thai Rice Exports Association Honorary President Chukiat Opaswong admitted that at present Vietnam has been exporting larger quantities of rice and is trying to turn itself into the rice-trading hub of Indo-China and ASEAN region after 2015 when the AEC is established. He pointed out that Vietnam could export more rice as it has been importing rice from neighbours, notably Cambodia which is selling rice surplus from domestic consumption; thereby, Vietnam can keep rice prices cheaper than Thai rice thanks to the larger quantities.

Mr Chukiat suggested that Thailand should adapt itself by using credibility in rice exports and importing more rice to make the country the regional and global hub for rice trade; however, he noted that free trade zoning should be set up to prevent negative impacts on local farmers and mixture of foreign and Thai rice. He cautioned that Thailand might lose the status of being the champion of global rice traders upon failure to take any appropriate action.

Meanwhile, the Ministry of Commerce clarified that Thailand is actually importing rice from neighboring countries under the ASEAN Free Trade Agreement (AFTA); however, only imports of broken milled rice are allowed for industrial production such as noodles and flour, not for direct consumption due to fear for crop mixing problem. In addition, the imports can be approved only at six border checkpoints with adequate inspection to prevent low quality rice and genetically modified rice from mixing with premium rice in Thailand.

Instead of worrying about losing market shares to Vietnam, the Minister suggested that related sides should have paid greater attention to the real objective of the AEC which is to enhance economic cooperation. Hence, it will indeed be better if Thailand and Vietnam cooperate and use the AEC for mutual benefits and turning ASEAN as a whole to be the global hub for rice trade.