The Asian countries can help avoid world rice price shocks by reducing export restrictions, placing less emphasis on self-sufficiency, retooling Thailand’s rice pledging program, and expanding coordinated rice policies with India and Pakistan.
According to a working paper from the Asian Development Bank (ADB) “so far, the rice market appears to be holding steady and current production estimates suggest that overall prices will remain stable, which is good news in a time of worry over the global corn, wheat, and soybean markets,” said ADB, Practice Leader for Agriculture, Food Security and Rural Development in the Regional Sustainable Development Department, Lourdes Adriano. “To enhance resiliency and ensure that rice prices do not jump beyond the reach of the region’s poor, policy makers must think and act regionally.”
The 2007-2008 rice price hike was triggered in part by export restrictions, and panic buying by importers. The working papers, produced out of the recent ASEAN Rice Trade Forum organized by the ASEAN Food Security Reserve Board, the ASEAN Secretariat, and ADB, show regional trade restrictions pushed global rice prices up 149 per cent.
Instead, the papers recommend that rice importing countries lower their self-sufficiency targets in exchange for commitments from exporting countries to stay away from unilateral export restrictions. Importing countries would feel less need to insure themselves against trade disruptions and exporting countries would gain new markets.
Assuming normal weather conditions and same macro conditions, rice output among ASEAN nations is expected to grow at 1.37 per cent annually, from 110.5 million metric tons in 2010-2011 to 128.3 million metric tons by 2021-2022. Harvests will increase by 1.22 per cent annually, while harvest area will increase by 0.15 per cent to nearly 47 million hectares by 2022.
Asian countries can avoid world rice price shocks by reducing export restrictions
Follow ADB’s advice to reduce rice shocks
