Thailand floats rice cartel idea

BANGKOK, Thailand (AP) -- Thailand, the world's biggest rice exporter, said Friday that it wants to form an OPEC-style cartel with four Southeast Asian neighbors, so that together they have more control over international prices of the commodity.

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.

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."

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.

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.

Vichienchot, the Thai government spokesman, confirmed that Prime Minister Samak Sundaravej brought up the idea of a grouping modeled after OPEC during his 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.

Samak said Wednesday Myanmar supported the idea, while officials in Vietnam have said they are studying it and could possibly support it.

Much like the Organization of Petroleum Exporting Countries sets oil prices, the tentatively named Organization of Rice Exporting Countries would help set prices for rice. Supporters say that would ensure farmers benefit from the increasing demand for the staple. E-mail to a friend

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