BANGKOK (Commodity Online) : South East Asian (SEA) region comprising two of world's largest rice exporters, Thailand and Vietnam remained as world's top trade destination for the commodity.

The food crisis of 2008 has inspired various countries in Asia to vie for status as the world's rice bowl and many hope to be able to dethrone Thailand.

Among the key members in the region, Thailand, Vietnam, Burma, Cambodia and from south Asia, India and Pakistan continue to dominate the rice trade, with 21.32 million tonnes of the total global trade of 29.3 million in 2009. Their share is expected to rise to 23.4 million tonnes of the total of 30.84 million this year.

The 2008 food crisis has led to significant developments and expansion in Asia's rice industry but Thailand, as the leading exporter, has stressed its determination to maintain its leadership position by implementing various measures.

One such measure that Thailand implemented last year was to guarantee farmers' incomes, and the government remains optimistic about maintaining its export leadership position with expected exports of about 10 million tonnes this year.

Local investment in the rice industry - from grading to advanced silos and storage units - boomed in 2008 and 2009, when the oil crisis drove up the prices of many grains including rice, which sold at a record high of $1,222 per tonne for the Hom Mali variety.

Seven rice-grading projects, with a combined one billion baht in investment capital, received Board of Investment privileges in 2008 and the number increased to eight worth 930 million baht in 2009.

The agency also provided investment promotion for four rice silos, valued at more than 600 million baht during the period.
On the other hand Vietnam, the world's second largest rice exporter, has set aside a fund of US$6 million (195.8 million baht) to improve rice quality.

Farm co-operatives are also able to obtain soft loans to build facilities such as milling plants, processing units, and warehouses.

Cambodia-Vietnam Foods Company has also been formed by the Vietnamese state enterprise Vinafood, Investment and Development Joint Stock Co (IDCC) and Green Trade Co of Cambodia to strengthen co-operation between the two countries in raising their production and export profiles.

Office of Agricultural Economics, said the recent expansion plans are an attempt to cash in on the rising global market as local governments become increasingly aware that rice could offer sustainable income and tackle poverty among farmers, a major problem for many governments.

Improved incomes for farmers would not only resolve internal difficulties but also minimise problems such as illegal immigrants, it said.

Burma has placed more importance on its rice industry in the past decade by allowing freer trade with the aim of promoting the grain as the major export item.

Early this year, the government set up the national Myanmar Rice Industry Association (MRIA), a merger of three existing separate associations - the Rice and Paddy Traders' Association, the Rice Millers' Association and the Paddy Producers' Association.

Official statistics show that Burma's rice exports in the first nine months of the 2009-10 fiscal year (April to December) have already exceeded 1.2 million tonnes against a target of 1.5 million. The figures are a huge improvement over the totals of recent years, when the country's rice exports had dwindled below 100,000 tonnes.

It also plans to expand markets to more countries such as Russia, Ukraine, Australia, and North Korea, as well as increase exports of high-grade rice to countries in the Middle East and Europe.

Thai Rice Exporters Association, said that the Thai government should have a clear stance on allowing the private sector to help improve the rice business in neighbouring countries.

Although Burma was once the world's top rice exporter, it has been lagging others due to internal problems and is now seeking co-operation from others, including Thailand, to improve its rice operations, it said.

According to Association, several factors have recently eroded the competitiveness of Thai rice. Top among them is higher costs and selling prices, a condition that could threaten Thailand's global market leadership sooner than anyone thinks.

Vietnam's export figures, at 6 million tonnes last year, have come close to those of Thailand, which sold 8.5 million tonnes. Burma, blessed with fertile soil and water, will easily be able to double its rice production and exports as well.