VietNamNet Bridge - If Vietnam decided to cooperate with Thailand instead of competing fiercely, both of the countries would be able to sell rice at good prices instead of prices the Philippines wants.

Under the current mechanism, the Filipino National Food Authority (NFA) chooses rice suppliers through bidding. The suppliers selected have to offer the lowest prices, which must be under the ceiling prices set by NFA.

If exporters all offer prices higher than ceiling prices, they will lose the bids. NFA then will organize the bids again, or discuss separately with each exporter, and will choose suppliers who accept to sell rice at prices lower than the ceiling prices.

The mechanism, say Vietnamese analysts, allows the Philippines to gain the initiative, while exporters, including Vietnam and Thailand, stay passive. 

However, if Vietnam and Thailand cooperate with each other, they will be able to change the situation.

The Philippines buys 1.8 million tons of rice every year, which is equal to 10 percent of both countries’ total annual rice export volume. 

If Vietnam and Thailand cannot sell rice to the Philippines, each of the countries will have one million tons of rice more in stock. 

Meanwhile, if Vietnam and Thailand insist on selling rice to the Philippines under the current mechanism, they will have to sell rice cheaply. The low prices will be referred to by other importers when negotiating contracts. 

This means that Vietnam and Thailand not only have to sell rice cheaply to the Philippines, but also have to apply the same low prices for all 18 million tons of exports.

If Vietnam cannot gain the initiative in exporting rice, all of its efforts to develop rice production and ensure better profits for farmers will be in vain.

An analyst noted that Vietnam and Thailand together provide 50 percent of the total rice supply in the world market, and if they cooperate, they will not only gain the initiative in selling rice to the Philippines, but also will be able to control the world market price.

In fact, the government has many times advised joining forces with Thailand and other countries to form a rice exporters’ association.

Cooperation proves to be the best solution to help develop Vietnam’s and Thailand’s rice production and the only solution to protect Vietnamese and Thai farmers’ benefits.

According to the Vietnam Food Association (VFA), Vietnam had exported 2.1 million tons of rice by the end of May, earning $870 million, a decrease of 10 percent in export volume and 13 percent price decrease in comparison with the same period in 2014.

To date, Vietnam has signed contracts on exporting 3.5 million tons of rice, or 8 percent lower than the same period of last year. 

Thailand and India, the Vietnam’s biggest rivals, all have big inventories. Thailand is reported to have 15-16 million tons in stock, while India has 23 million tons.

TBKTSG