Advisor (Agriculture, Food Security, & Rural Development), ADB E-mail: ladriano@adb.org Outline Setting the context: “Unique” Opening Remarks What’s the issue? Sources for variability What’s the story Session 1: Market situation and outlook Session 2: Was trade the culprit or can trade reduce volatility? Session 3: What if we have a big disaster? Session 4: Options for price discovery Summary and takeaways Segue to Sessions 5 & 6 Setting the context: Q: Is the ASEAN Rice Trade Forum like any other forum? Yes and No A: YES & NO Yes: Platform for discussing particular issue/s about regional rice market Issue: Extreme rice price volatility and how do we prevent extreme price swings (up & down)
No: Forum is a “pilot” for AFSRB (in context of the
ASEAN Integrated Food Security Framework) Rice market information (gather, share, exchange) Rice market intelligence: platform for informed dialogue with major stakeholders in the regional rice value chain Part of participatory-based policy planning process Setting the context: backdrop & principles for the exchange of views Asian agriculture competitiveness will soon be challenged: needs to shape up or lose it Regional context: lay the roots for sustainable competitiveness; requires working together 2015 ASEAN becomes one regional economic community Priority agenda # 1: Rice because its still the staple food; but dialogue needs to be broadened-> mutli- stakeholders AIFS but key would be trade (“balck box”) Discussions have to be science- and evidence- based What’s the issue?
•Extreme rice price swings (up & down) in the
regional rice market •Focusing on the regional (ASEAN) rice market (trade- “black box”) What are the sources of variability and can ASEAN do something about it? Rice Prices in 2008, Export Restrictions and Panic Buying
•Government policies may have influenced the price
surges; climate change •ASEAN can provide regional public service: coordinated & coherent policies What’s the story & what are the takeaways? 1. Session 1: Rice market situation (2011/12) and outlook (2011-2021) – globally & ASEAN 2. Session 2 Scenario: Is trade the culprit or can trade reduce volatility? 3. Session 3 Scenario: What if a natural calamity strikes? Will the APTERR, a regional rice safety net, be adequate to contain price spikes? 4. Session 4: What other options may be considered for managing rice price risks and volatility? Session 1: Significance of ASEAN in World Rice Markets from to present and till 2022 (as it was in 1912) 100% 90% 80% 70% 60% 50% 40% 30% ROW 20% ASEAN 10% 0% Session 1: Downward price range trend Session 1: Upward rice net trade Session 1:Crystal ball versus AGRM/Rice flow model Session 2: Was trade the culprit or can trade reduce volatility? Trade was not the culprit: lack of information about supply-demand leading to government imposing trade restrictions & consumers started hoarding; low global stocks but certainly not about rice shortage What is a price shock? 2007-2008, world rice prices rose from 117% to 149%; How about price slumps Why are price surges not good? Poverty increases Price variability of < 10% :“stable trend” Using the rice flow model, trade can reduce volatility. How do we build the confidence on trade? Session 2: Information shared, validated, and more What did we learn: (i) ASEAN economies generally self-sufficient in rice; same exporters & importers since 1912- comparative edge; changes in competitiveness may be due to policy measures; (ii) look at concerns of actors in rice value chain what would make them more competitive? (iii) views from farmers’ groups, traders, national government Ok on ASEAN’s food security response (AIFS: emergency rice reserve, fostering trade, market information) was appropriate but can be more proactive Suggests AIFS + on the basis of 2 criteria: (i) effect on reducing volatility, and (ii) transactions costs of implementation AIFS + suggestions: (i) trade facilitation (forward contracting reduced elf-sufficiency for guaranteed imports, talks with India); (ii) market information & market intelligence; (iii) national & regional rice stocks Other suggestions: (i) code of conduct on how to relate during times of crisis, (ii) investments for small scale farmers Session 2: What’s the role of the forum? Information sharing & verification
Gathering information from various stakeholders
Understanding the views & concerns of stakeholders in the rice
chain
Gain knowledge: rice flow model not just for market
information but for market intelligence (e.g., what are the possible impact of government policies if it invests on making small scale farmers more productive? )
Question: Should the forum be a platform for discussing &
soliciting policy recommendations based on informed analysis? Session 3: What if we have a big natural disaster? Would APTERR be sufficient? Session 3: Additional learning from the forum Session 4: Options for price discovery & price risk management Sessions 1-4 Takeaways- Forum to unbundle trade as a “black box” What’s next & ways forward
Enter Sessions 5 & 6
For information, contact: Lourdes Adriano ladriano@adb.org