Thailand drops plan for rice cartel that would have fixed prices
By MICHAEL CASEY, Associated Press Writer
Tue May 6, 9:26 AM ET
BANGKOK, Thailand - Thailand is dropping plans to create a Southeast
Asian rice cartel that would have fixed the price of the skyrocketing
commodity over food security concerns, the country's foreign minister
said Tuesday.
The proposal to create an OPEC-like cartel was first floated last week
by Prime Minister Samak Sundaravej to give rice producers greater
control over rice prices, which have tripled since December. But the
idea was heavily criticized by senators in the Philippines, a major
importer, as well as some Thai rice exporters.
"We are not talking about setting up a rice cartel," Foreign Minister
Noppadon Pattama said after a meeting with ambassadors from six rice
exporting countries in Asia. "If Thailand sets up a rice cartel and
fixes a price, that will make matters worse and worsen food security."
Instead, Noppadon said Thailand proposed holding a meeting on rice in
the next month or two that would work with top Asian exporters
including India, China, Vietnam, Myanmar, Cambodia and Pakistan to
improve productivity. He also said exporting countries would discuss
sharing of technology, market information and price information.
Noppadon denied that the about face on the cartel had anything to do
with concerns about the impact on the Philippines.
"We are sympathetic to all human beings, not just the Filipinos," he
said.
Rice prices have tripled this year, with the regional benchmark
hitting $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.
Supporters say that a rice cartel =97 tentatively named Organization of
Rice Exporting Countries =97 would ensure farmers benefit from the
increasing demand for the staple.
Despite Thailand's reluctance, Cambodia's Information Minister Khieu
Kanharith insisted that an association of rice exporting countries
could still be useful for avoiding a "price war, which could affect
livelihoods of peoples" in the region and beyond.
He said his government will pursue discussion about forming such an
association at a meeting of the leaders of five Southeast Asian
countries in Vietnam later this year. The five countries =97 Cambodia,
Laos, Vietnam, Thailand and Myanmar =97 have formed a sub-regional
cooperation forum known as Ayeyawady-Chao Phraya-Mekong Economic
Cooperation Strategy, ACMECS.
Their next meeting is planned to be held in Vietnam in October, Khieu
Kanharith said.
But Edgardo Angara, chairman of the Philippine Senate's Committee on
Agriculture, has expressed concerns that a small group of producers
could control the staple food and price it out of reach for "millions
and millions of people."
"It is a bad idea," he said Friday. "It will create an oligopoly and
it's against humanity."
Meanwhile, China said it has enough grain to keep food prices steady,
amid reports authorities were struggling to prevent the smuggling of
rice to overseas markets.
China views basic self-sufficiency in staple grains for its 1.3
billion people to be a national strategic priority, and with grain
prices soaring internationally it is moving to ensure domestic
supplies and curb exports, the National Development and Reform
Commission said in a statement on its Web site.
The comments, published in the form of a question-and-answer session
with an unnamed official, emphasized Beijing's ability to keep grain
prices stable after four straight years of bumper harvests.
"Our grain supply and demand is basically steady, our reserves are
full and we can guarantee the supply and stability of grain prices,"
the statement said.
It said reserves alone could meet demand for six months. The
government is shifting grain from the north to heavily populated
southern areas where consumption outstrips production.
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