Globalization: Asia Rice War Erupts with USA, China, Vietnam & Cambodia in Major Moves!

By Pooky, this blog economic journalist

Major Growers in Major Moves:

China and Vietnam has taken the lead in an “Asia Rice Growing and Export War.” Meanwhile the US is going big with a new rice strain, while Thailand protects and support.

“Cambodia has a potential rice growing region equal to Vietnam in size,” said Vietnam’s investment promotion unit. And in Thailand, in a major study on Thai rice, the report said, “Thailand rice sector is in the worse shape in 10 years, under the current government.”

The Market:

Thailand, Vietnam and the US are major rice exporters with Thailand exporting about 8 million, Vietnam a close second at 6 million and the US at 4 million. Cambodia has risen fast in the past 5 years to currently 1 million.

Asia’s dominance may also be waning as rich Middle Eastern countries are investing in Africa to grow rice. The World Bank has also drawn up a plan to help poor countries develop their agricultural sector, with a massive aid of about US$3 billion dollars. Much of that will be for rice.

Vietnam Eyes Cambodia:

Vietnam is joining with Cambodia rice traders and have invested in rice growing in Cambodia-with the objective of raising the productivity of Cambodian rice growing and use the increase excess to compete with Thai exports.

ASEAN Liberalize Markets:

Under ASEAN free trade area, inter-ASEAN rice trade will be liberalized, with many Thai rice growers representative groups joining to pressure the Thai government against opening up the Thai market.

China Interest Expands:

Meanwhile, China is also investing in Cambodia’s rice growing and plans to use Cambodian rice to stock a China’s strategic rice stock-pile to feed China in case of emergency.

Thailand in Major Move:

Meanwhile, also,  in Thailand, CP, the agricultural conglomerate headed by one of Asia’s richest individual, Tanin, plans to invest in rice growing in Thailand, as a new priority business for CP. The CP head have called for Thailand to let foreigners buy Thai land and invest in agricultural.

Thai interest, as reported by the Vietnamese investment promotion unit, also said Thai business interest are also competing with Vietnamese interest in the rice growing and exporting business in Cambodia.

The US Develops High Yield Strain:

Meanwhile the US has also said it has developed a new strain of rice call Jasman that mimics the high end popular Thai rice, Jasmin, but that the rice has about 5 times the productivity of the Thai Jasmin rice. The US says it will use the new strain to in about 60% of its rice farms, mostly in Texas. The US currently exports rice but US rice has had a limited impact because it is un-popular.

Protectionism Still Strong:

Thailand is planning to protest the US on the new strain of rice, however, the US insists that the genetics that was used in the new strain, has nothing to do with the Thai Jasman rice.

Rice as a commodity has seen the price fluctuate significantly in recent years, with bouts of fear that there will not be enough rice to supply the rising global markets and shortages at times looked likely.

Thailand is also changing the rice support scheme and this has added both risk and opportunities, because few studies have been made to see if the change will impact productivity or rice growing area size. The Thai attention has shifted instead to fear that imported Cambodian rice will “Sneak” into the Thai rice support scheme.

The US has talked to the Thai about this new rice support scheme as being anti-trade and against WTO, however, Thailand maintains that the US should look at its own rice support scheme before criticizing Thailand. US rice growers rely significantly on its government support.

Potential for Productivity Increase:

Thai and Cambodian rice growers have among the worlds lowest productivity, while Cambodia has opened up its rice business for foreign interest to increase growing area and productivity, Thailand is currently in a witch hunt and is against foreign interest in Thai farms. The witch hunt had been taken to the extent that the Thai government says it will investigate the Thai wife of foreigners, suspected of using the wife to buy Thai land for rice growing.

Furthermore, Thai agriculture is highly chemical based and increasingly mechanized, while there are benefit, deterioration and harmful rice strain have multiplied significantly, hurting Thai growers greatly.

Nationalism Reign in Thailand:

The current government in Thailand of Abhisit, is allied with the media tycoon Yellow Shirt of Sondhi Lim. The media in Sondhi control, including prints and cable, have been running stories that massive amount of Thai land have been gobbled up by foreigners through nominees and are in the rice business-leaving Thai farmers as slave to foreign interest.

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