Would a Southeast Asian Rice Futures Market Be Feasible, and What of Food Security?

In 2010, it was proposed that Singapore consider hosting an international rice futures market, with cited benefits being enhanced price discovery and price stabilisation. The RSIS Centre 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 that these conditions would affect a contract. Whether feasible or not, the proposal for a rice futures market 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.