BANGKOK (Dow Jones)--Thailand and Vietnam, the world's two largest rice exporters, will strengthen rice trading cooperation in a bid to stabilize rice prices in both the countries, industry association executives said in a statement late Wednesday. 
 
The two countries will collaborate in marketing strategies and to increase rice yield, and avoid price cutting to ensure fair ompetition and make prices more predictable, according to the Rice Exporters Association of Thailand and the Vietnam Food Association.

"Thai and Vietnamese traders are being hit by rapidly rising local and global rice prices. A joint effort is needed to stabilize prices and maximize benefits for our traders," REA President Chookiat Ophaswongse said.

  Both the associations said the current market situation was unbalanced, with strong demand and dwindling supply in both countries having led to a surge in prices. Supply is low on account of lower cultivation area and hoarding by millers.

  Chookiat said the high prices are also being attributed to speculation, which both the countries need to address, failing which local prices would soar to a point where exporters won't be able to buy rice from local mills.

  Vietnam Food Association Chairman Truong Thanh Phong said tight supply and higher prices will likely reduce Vietnamese rice exports to 4 million-4.5 million metric tons this year from an earlier estimate of 5 million tons.

  According to Chookiat, Thai rice exports could fall below the government's target of 8.7 million tons if prices continue to rise.

  Thailand and Vietnam account for around 50% of the world rice trade. They exported a combined 14 million tons of rice last year.