OPEC-style rice cartel proposed by Thailand
Last Updated: Friday, May 2, 2008 | 6:55 AM ET
The Associated Press
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Thailand, the world's biggest rice exporter, said Friday that it wants to form an OPEC-style cartel with four of its Southeast Asian neighbours to exert more control over rice prices, which have tripled this year.
The price of rice has reached $1,000 US a ton for 100 per cent Grade B white rice, the regional benchmark.
"Though we are the food centre of the world, we have had little influence on the price," said Thai government spokesman Vichienchot Sukchokrat. "With the oil price rising so much, we import expensive oil but sell rice very cheaply, and that's unfair to us and hurts our trade balance."
Vichienchot said Prime Minister Samak Sundaravej brought up the idea during discussions Wednesday with Myanmar's Prime Minister Lt.-Gen. Thein Sein in Bangkok.
"The idea is that we can work together to improve yields and production and have some influence on setting the prices, making it a little more balanced," Vichienchot said.
Global rice prices have risen sharply this year amid global food inflation, poor weather in some rice-producing nations and growing demand that has outstripped supply. Some Asian countries, including India and Vietnam, have contributed to the problem by curbing rice exports to guarantee their own supplies.
Samak said Myanmar supported the idea, while officials in Vietnam said they are studying it and may support it.
Laos Foreign Ministry spokesman Yong Chanthalansy said Friday his country would "seriously consider" the idea, saying a cartel would give the five countries "bargaining power."
Cambodia, which in the past has championed the rice cartel idea, also welcomed the latest proposal and said it was a "necessity" given the current global food crisis.
"By forming an association, we can help prevent a price war and exchange information about food security," Cambodia's chief government spokesman Khieu Kanharith said.
Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said any rice cartel would have little impact because it would exclude big producers like India and Pakistan.
"When there is a crisis with rice, they [the government] talk about this cartel. It has never happened and I don't think it will," Chookiat said.
Much like OPEC sets oil prices, the tentatively named Organization of Rice Exporting Countries would help set rice prices to ensure farmers benefit from increasing demand for the staple.
The moves came as prices for rice and other food staples have been rising rapidly around the world, sparking violent protests in Haiti and Egypt along with concerns of unrest elsewhere amid profiteering and hoarding.
The sudden crisis — the price of rice has more than tripled since January — has experts calling for major changes in food production to improve crop yields and cut waste.
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