Thailand and Viet-nam, the world's largest rice exporters, have agreed to revive an effort to ensure appropriate prices on the world market through cooperation.

Chookiat Ophawongse, president of Thailand's Rice Exporters Association, said yesterday that the association and the Vietnam Food Association had last week signed a working paper to form a partnership for the improvement of the rice trading system. "Thailand hopes that Vietnam will increase its rice prices after cooperation on the exchange of information. This will stabilise the price of rice - a major export product for both countries," he said.

The agreement should help avoid the problem of price-cutting. Moreover, the pact will also lead to cooperation to raise rice-trading standards to stabilise prices and narrow the price differential between the two countries.

Vietnamese exporters have quoted lower prices than Thai firms on the world market because they lack warehouses for stocking the cereal. Increased cooperation should help them improve their logistics systems and make Vietnam realise the importance of a stable rice price.

According to the Thai association, the Vietnamese rice price is US$30-$60 (Bt1,138-Bt2,277) lower than Thai rice. The price of 100-per-cent Thai rice is $320 per tonne, while Vietnam quotes the same kind of rice at $295.

Thailand has exported 4.05 million tonnes of rice so far this year, valued at $1.3 billion, while Vietnam exported 2.75 million tonnes. The two countries are the most active rice sellers on the global market.

Chookiat said that although the cooperation had just been initiated, it was a good sign that both countries will have more bargaining power on prices in the world market.

The two countries had earlier planned to initiate a similar accord to assure stable rice prices on the market, but the idea was shelved until recently.

Asked about possible collusion in rice trading, Chookiat said the cooperation was not aimed at raising market prices. Instead, it will help rice exporting countries improve their trading standards in the same way as Opec (Organisation of Petroleum Exporting Countries) does in the oil sector.

To tighten this cooperation, trade ministers of the two countries will discuss the topic again during a September meeting in Vietnam.

Meanwhile, private companies from both countries will set up meetings every three months.

The countries are also planning to exchange trading information every week and to jointly invest in warehouses and logistic improvements in the future, said Chookiat.

Petchanet Pratruangkrai

The Nation