MANILA, Philippines (Xinhua) - The Philippine-based International Rice Research Institute (IRRI) today renewed its call for the establishment of a rice index and commodities exchange in Asia.
IRRI Director-General Robert Zeigler said a rice futures market will help stabilize rice trade in the region.
"A well-regulated rice futures market will benefit society and give farmers an opportunity to increase their incomes," said Zeigler on the sidelines of a public session on sustainable agriculture production during the 23rd World Economic Forum on East Asia.
A well-designed futures market, he said, will allow farmers to sell their produce when prices are favorable. To do this, countries would need to put up enough storage and port facilities to handle large volumes of grain.
Socieconomic Planning Secretary Arsenio Balisacan said the Philippines welcomes the idea of having a rice futures market in the region.
"The presence of a futures market, at least for rice, should be beneficial (for the Philippines) and for the world because it would stabilize (prices)," said Balisacan.
IRRI initially pitched the idea of a regional rice futures market in 2010, but Zeigler said Asian countries were lukewarm to the idea. Singapore was urged to host a rice futures and a spot exchange, which includes the actual and selling of rice for immediate delivery.
"My sense is that people fear futures market because they equate it with speculators and obscene profits," he said.
Zeigler said participants can put in place mechanisms to minimize speculation.
The size of the Asian rice economy has been estimated at $160 billion.