Vietnam, Cambodia mull rice venture to steady prices

Sunday, August 16, 2009

Workers harvest rice in a Mekong Delta paddy.

Sunday, August 16, 2009

Vietnamese and Cambodian officials met this week to discuss setting up a state-owned joint rice mill project to control prices, a local association said.

An official from the Vietnam Food Association said Thursday that the Southern Food Corporation (Vinafood 2) and the Bank for Investment and Development of Vietnam would be the Vietnamese partners, representing a 60 percent stake in the Cambodia-based joint venture.

The first rice venture between the two countries would combine the rice processing experience of the Vietnamese partners with Cambodia’s rice production sector, which has been largely untapped for exports, said the official.

Vietnam is the world’s second biggest rice exporter, having shipped nearly US$1.7 billion worth of rice in the first seven months this year.

Cambodian rice yields have been increasing and its government has encouraged businesses to process for export, according to the association.

About 1 million tons of Cambodian rice was ready for export, said the association. The competition, as well as a high summer-fall yield in Vietnam, was pushing prices down, according to local officials.

The new venture is expected to help prevent prices from falling, the association said.

The association aims to prevent price drops by asking members to buy 400,000 tons of the grain from farmers in order to increase its rice stockpiles.

Regional association

A Thai official said Saturday that five Southeast Asian nations may set up a rice-trade association next year to cooperate in stabilizing rice prices.

Thailand, Vietnam, Cambodia, Laos and Myanmar will also cooperate on other issues related to food security and production, said Chiya Yimvilai, a spokesman at a meeting of ASEAN economic ministers in Bangkok. The countries would also work together on developing rice products, he said.

“It won’t be like OPEC,” said Chiya, speaking at a press briefing. “Our objective is to help prevent prices from falling too much, but we won’t jointly set the prices.”

Reported by Minh Quang (With additional reporting by Bloomberg)


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