The world's two largest rice exporters, Thailand and Vietnam, have agreed to underline their marketing collaboration and stay away from price cutting in a joint effort to stabilise rice exports. Exporters agreed that the global market situation had been ''unusual'', with demand high but supply from both countries low because of global warming and the fact that farmers have shifted to grow other energy crops said Chookiat Ophaswongse, president of the Thai Rice Exporters Association.

He made the comment at the fourth Thailand-Vietnam Rice Trade Co-operation Meeting yesterday in Bangkok.

Thailand and Vietnam account for more than 50% of the world rice trade, shipping 9.5 million and 4.5 million tonnes respectively last year in a world market of 28 million tonnes.

According to Mr Chookiat, although there was now a sellers' market, the exporters of the two countries wondered why they had been suffering losses over the last two months from advance orders due to rising domestic and world prices.

A joint effort was therefore necessary to stabilise prices as well as set a range of rice prices, he said.

He said current high rice prices partially stemmed from speculation, which governments needed to address, otherwise domestic rice prices would rise to the extent that exporters could not afford to buy from local farms and mills.

Mr Chookiat predicted higher domestic prices would push down Thai exports to about 600,000 to 700,000 tonnes per month over the second quarter from one million tonnes a month earlier.

The Commerce Ministry is being urged to release its rice stockpiles into the market to help ease the price pressure.

According to Mr Chookiat, Vietnam is also suffering from tight supply in the country. Rice exports from Vietnam, were expected to shrink to between 4 million and 4.5 million tonnes this year from an earlier estimate of five million tonnes.

Thailand's rice production is estimated at 29.9 million tonnes of paddy this year, 23.38 million tonnes of which would come from the first crop, up 2.4% from last year, and another 6.5 million, a marginal decline, from the second crop.

Truong Thanh Phong, chairman of Vietnam Food Association, said paddy output in Vietnam was estimated at 36.5 million tonnes, unchanged from 2007.

Vietnam would keep grain shipments unchanged this year at 4.5 million tonnes because its cultivation area has been shrinking, he added.