Thailand floats idea of OPEC-style rice cartel

Thai Commerce Minister Mingkwan Saengsuwan plans to talk with his counterparts in Laos, Myanmar, Cambodia and Vietnam about forming a cartel to gain more influence over prices, said government spokesman Vichienchot Sukchokrat.

“Though we are the food center of the world, we have had little influence on the price,” Vichienchot said. “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.”

Rice prices have tripled this year, with the regional benchmark hitting US$1,000 a metric ton for 100 percent Grade B white rice.

The run-up in rice prices has come amid global food inflation, poor weather in some rice-producing nations and 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.

In the Philippines, the world’s top rice importer, Senator Edgardo Angara, chairman of the Senate Committee on Agriculture, fears the potential that a small group of producers could control a food staple and set prices out of reach of “millions and millions of people.”

“Almost 3 billion people are rice eaters. It’s not a good idea. It is a bad idea. ... It will create an oligopoly and it’s against humanity,” he said.

However, Laos Foreign Ministry spokesman Yong Chanthalansy said Friday the Laotian government would “seriously consider” the idea of creating a cartel because it would give the five countries “bargaining power.”

“Our priority is to help vulnerable groups in the country, both the producers and consumers,” Yong said. “We are especially vulnerable because we are a landlocked country so everything depends on irrigation.”

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.

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