Asean plans to increase rice buffer stock

The Association of Southeast Asian Nations (ASEAN) are planning to increase the ASEAN Emergency Rice Reserve (AERR) to help member-countries cope with the El Niño weather phenomenon.

National Food Authority (NFA) Deputy Administrator Gregorio Tan Jr. said members of the ASEAN want the AERR raised to the current buffer stock of 87,000 metric tons (MT) to as much as 100,000 to 500,000 MT.

This will be one of the highlights of next week’s meeting of the ASEAN Ministers of Agriculture and Forestry in Vientiane, Laos. Tan said that ASEAN has also been getting feelers from Japan, China and Korea, that they are interested in joining the AERR.

Tan said increasing the buffer stock to 500,000 MT will help members, especially those to be hardest hit, deal with the hot weather disturbance that is expected to prevail until next year.

"The ASEAN wants to raise the volume of the buffer stock so that member countries can draw from the reserve in times of crises or when domestic supply is inadequate," said Tan, adding that there have been instances in previous years when the Philippines availed of the AERR.

There was an earlier plan to hike the AERR to about 1.75 million MT but this is not feasible, according to Tan.

In next week’s critical meeting, Tan said members will come up with a resolution on the new volume for the AERR and have firmer details on how members can draw from the reserve, including prices and payment terms.

If the plan is realized, the higher AERR volume will benefit the country which is always beset with shortfalls in rice production and has been depending on rice imports to meet domestic consumption.

At the same time, it will protect rice-import dependent countries from soaring prices of rice in the world market.

"This should shield the Philippines from the possibility of the emergence of a rice cartel to be formed by major rice-exporting countries in Asia," said Tan.

There are talks circulating that major rice-exporting nations such as China, India, Pakistan, Thailand and Vietnam are meeting in Bangkok next week to discuss the formatioin of an Organization of Rice Exporting Countries (OREC).

The OREC will function like the Organization of Petroleum Exporting Countries (OPEC) which dictates world oil prices.

But Tan said it will be difficult for the region’s biggest rice producers to duplicate the feat of the OPEC.

"Unlike the OPEC whose product is non-perishable, rice is highly perishable and deteriorates after four to six months, making it necessary to dispose off the commodity the soonest time possible," adding there were several attempts by the likes of Thailand and Vietnam to form a cartel-like group but these never prospered.