Singapore could play a leading role in regional food security and help stabilize rice prices if it took up the opportunity to host a rice futures and a spot exchange, which includes the actual buying and selling of rice for immediate delivery.
In the report Never an Empty Bowl: Sustaining Food Security in Asia, produced by a high-level international task force on rice-based food security, the need for a rice futures market is highlighted.
The report says that, “Under normal circumstances, a robust and deep rice futures market should add substantial stability and transparency to the formation of rice prices, which would help build confidence in the reliability of the world rice market.
“However, the successful development of a commodity futures market depends heavily on the legal structure of the contracts (and their perceived enforceability) and on access to modern financial markets to provide the underlying liquidity that makes a futures market useful to traders. Singapore seems a logical place for a rice futures market because it can satisfy these criteria.”
Ambassador Ong Keng Yong, member of the task force and member of the International Rice Research Institute (IRRI) Fund Singapore Board that promotes and facilitates support for rice science, agreed with the report, highlighting Singapore’s potential to play a role in helping to secure the food supply of the region.
“The fact that we don’t grow rice commercially in Singapore means we have added impetus to take an active interest in the security and sustainability of our rice supply,” said Amb. Ong, who is the director of the Institute of Policy Studies at the National University of Singapore and ambassador-at-large in the Singapore Ministry of Foreign Affairs.
Other notable members of the task force were World Food Prize recipient M. S. Swaminathan, Director General of the United Nations (UN) Economic and Social Commission for Asia and the Pacific Noleen Heyzer, Executive Director of the UN World Food Programme Josette Sheeran, and Director of the Centre for Chinese Agricultural Policy Jikun Huang.
The report, organized by the Asia Society and IRRI, and launched on 27 September 2010, says that climate change mitigation research, farming infrastructure, and market price stability are all needed to ensure reliable rice supplies. This could improve food security in Asia and decrease the number of people living in poverty there by 15% by 2030.
Also on the task force was Dr. Robert Zeigler, the director general of IRRI and the chairman of the IRRI Fund Singapore Board. Dr. Zeigler pointed out that Singapore was specifically mentioned in the report as a potential location for a rice futures market given its strong legal structures and transparent access to financial markets.
“The size of the Asian rice economy is approximately US$160 billion and Singapore is well equipped to handle this,” said Dr. Zeigler. "Significant storage and port facilities for handling very large volumes of grain will probably also be required to meet the needs of a regional or even global rice exchange.
“Singapore also has great potential as a regional leader in research investment, contributing to the next generation of plant scientists, and further strengthening its engagement with the wider region,” he added.