The private sector wants Thailand to co-operate with neighbouring countries on rice production in order to beat rising costs and maintain long-term export leadership in the commodity.

Burma has become the newest destination for foreign investors interested in rice production, with Japanese firms paying more attention to milling and exporting short-grain japonica rice due to the suitable climate, availability of fertile, arable land and low production costs.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association (TREA), said Japanese firms had shifted to growing rice in northern and central Burma and reduced their cultivation in northern Thailand, especially Chiang Mai and Chiang Rai.

Japonica rice grown in Thailand is now supplied only to local Japanese restaurants, as the Thai grain has no sticky quality, making it inferior to the Burmese harvest, which Japanese investors can export to their homeland and other countries.

Exports of japonica rice from Thailand peaked at 800,000 tonnes in 1993, when there were fears of a looming food crisis.

Besides the Japanese, the Burmese government is also welcoming Taiwanese, Malaysians, Singaporeans and Chinese wanting to invest in the rice industry through joint ventures with local businessmen.

Mr Chookiat said Taiwanese investors were even involved in seed improvement, selling the finished product to Burmese farmers.

However, Thai rice companies continue to shy away from Burma as too unstable, saying the government there gives priority to local prices. Rangoon last week suspended rice exports because of fear about food inflation at home.

Per-capita rice consumption in Burma is 200 kilogrammes a year, compared with only 80 kg for Thailand.

Although Burma can produce a similar amount of paddy as Thailand _ 30 million tonnes a year or 18-19 million tonnes of finished rice _ with a population of 56 million it has only about 300,000 tonnes left for export each year.

Burma is estimated to need at least another five years to increase paddy productivity by 10 million tonnes and have 2-3 million tonnes available for export. That would make it one of the world's leading rice exporting countries. It must also improve its rice varieties to meet market demand better.

Mr Chookiat said Thai companies were more interested in Cambodia, where the climate and crop varieties are more similar to those in northeastern Thailand.

He suggests Thailand cooperate with Cambodia in marketing rice globally, as 80% of its rice surplus is now shipped to Vietnam for re-export, helping to lift that neighbour's export total last year to almost seven million tonnes.

"The government should allow freer movement of rice if it wants Thailand to become a rice exporting hub. We need partners in neighbouring countries, or else we may not be able to compete with Vietnam," said Mr Chookiat, who also heads the rice exporter Huay Chuan Group.

Association vice-president Charoen Laothamatas said the Thai government should formulate a long-term vision for the rice industry.

The country is strong in marketing, so it should reinforce this potential together with research and development (R&D) to produce rice varieties that meet market demand, he said.

Mr Charoen said the Thai government spent less than 100 million baht a year on rice R&D, while Vietnam allocates as much as US$100 million a year to improve varieties.

Source: Bangkok Post