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Would a Southeast Asian rice futures market be feasible, and what of food security?

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Publication date
01/05/2012
Number of Pages
8
Language:
English
Type of Publication:
Working Papers & Briefs
Focus Region:
Asia and the Pacific
Focus Topic:
Market / Trade
Nutrition / Food Systems
Type of Risk:
Managerial & operational
Type of Risk Managment Option:
Risk coping
Commodity:
Crops
Author
Sally Trethewie
Organization
RSIS Non-Traditional Security Center

In 2010 it was proposed that Singapore consider hosting an international rice futures market, with cited benefits being enhanced price discovery and price stabilization. The RSIS Center for Non-Traditional Security (NTS) Studies hosted an Expert Working Group Meeting in Singapore in March 2012 to discuss the feasibility of this proposal. The market conditions of the Southeast Asian rice sector are seen as an impediment to the operation of an international futures contract, although opinion is divided as to the degree to which the conditions would affect a contract. The proposal raises several issues related to the region’s food security, in particular, the potential impact of futures trading on rice price volatility and the livelihoods of smallholder farmers. This NTS Policy Brief provides a summary of these issues and presents considerations for Southeast Asian policymakers.