Thai PM proposes rice cartel

Proposal for Opec-style group comes amid soaring prices for rice and other foods.

    Thailand is the world's biggest
    rice exporter [EPA]

    Samak said Myanmar supported the idea of a grouping modelled after the Organisation of Petroleum Exporting Countries while officials in Vietnam were already studying it, and could possibly support it.

     

    Supporters said the grouping, tentatively named the Organisation of Rice Exporting Countries, would ensure that farmers benefit from the increasing demand for rice.

     

    "We don't aspire to be like Opec, but we hope to be just a group of five to help each other in trading rice on the world market," Samak was quoted as saying in the Nation newspaper.

     

    Rice prices have tripled this year, reaching $1,000 a tonne for Thailand's 100 per cent Grade B white rice, which is the world benchmark.

     

    Experts have linked the global food crisis to higher fuel costs, the use of crops for bio-fuels and speculation on global commodity markets.

     

    Different dynamics

     

    Global food crisis


    UN says soaring price of basic foods such as rice and cereals could affect around 100 million of world's poorest people

    Global rice stocks have halved since hitting a record high in 2001 while demand is continuing to rise

    In Asia rice prices have almost tripled this year alone

    Financial speculators,

    rising populations, floods, droughts, increased demand from developing countries, and removing crops from the food chain to produce biofuels have been cited as factors

    Price rises have led producing nations to enforce export restrictions, further putting the squeeze on supply, especially in countries relying on imports

    Robert Zeigler, director-general of the International Rice Research Institute in the Philippines, said the lack of any specifics made it difficult to judge the merit of the Thai cartel proposal.

     

    "The first thing that comes to most people's minds is Opec, but rice production involves millions of small farmers working on small plots of land in many countries," he told Al Jazeera.

     

    "Oil is produced by a handful of multinationals in a handful of countries. So there are very different dynamics at work here."

     

    Zeigler said much depends on why the proposal is being made, whether to benefit farmers, the traders or to control prices.

     

    "The devil is in the details," he said.

     

    Mingkwan Saengsuwan, the Thai minister of commerce, is expected to meet soon with his counterparts in Laos, Myanmar, Cambodia and Vietnam to discuss the proposal.

     

    IN VIDEO


    Philippines battles rice crisis

    Vichienchot Sukchokrat, a Thai government spokesman, said the proposal would give the five countries more influence over the price of rice in the world market.

     

    "Though we are the food centre 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."

     

    'Bargaining power'

     

    Previous Thai governments have pitched the
    proposal for a rice cartel [Reuters]

    On Friday, Yong Chanthalansy, spokesman for the Laos foreign ministry, said the government would "seriously consider" the idea 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 Thai 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," Khieu Kanharith, Cambodia's chief government spokesman, said.

     

    The escalation 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.

    SOURCE: Al Jazeera and agencies


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