Thailand proposes rice cartel idea

BANGKOK, Thailand (CNN) -- Thai Prime Minister Samak Sundaravej piqued global interest this week when he suggested the formation of a rice cartel with other producers, a government spokesman said.

The idea came as his deputy and commerce minister proposed a rice producer summit that would include Thailand, Vietnam, India and China. Only India has so far voiced support; it is second to Thailand as the world's largest rice producer.

The notion of a rice cartel comes amid skyrocketing food prices that have been linked -- at least in part -- to rising energy costs, the business of another cartel: the Organization of the Petroleum Exporting Countries, or OPEC. Its 12 member nations supply about 40 percent of the world's oil.

Laos Foreign Ministry spokesman Yong Chanthalansy said Friday the Laotian government would "seriously consider" the idea of creating a cartel to gain "bargaining power," The Associated Press reported.

"Our priority is to help vulnerable groups in the country, both the producers and consumers," AP quoted Yong as saying. "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, AP reported.

"By forming an association, we can help prevent a price war and exchange information about food security," AP quoted Cambodia's chief government spokesman Khieu Kanharith as saying.

The United Nations is establishing a task force to address what it calls a global food crisis.

In early April, the Indian government announced a ban on exports of low-grade rice, which is essentially produced for domestic consumption, in an effort to control a surge in local food prices amid tightening supplies.

"There's no shortage of rice in India, but our buffer stock of rice has fallen. This means we could be going into the danger zone," said Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce & Industry.

Vietnam and Cambodia -- other major rice producers -- also have placed restrictions on rice exports.

Meanwhile, the Thai cabinet recently decided to release more than 2 million tons of rice to the domestic market in order to maintain the price of rice in the country. The typical goal of a cartel is to regulate prices.

Last week in the United States, warehouse retailer Sam's Club, a Wal-Mart division, announced it would begin limiting specialty rice sales. A similar retailer, Costco, reportedly took similar action, but no limits were put on the purchase of the mass-market rice that's primarily consumed in the United States. E-mail to a friend

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