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Saturday May 3, 2008 MYT 7:05:46 AM

Thailand floats idea of Opec-style cartel for rice


BANGKOK: Thailand, the world’s biggest rice exporter, said yesterday that it wants to form an Opec-style cartel with four South-East Asian neighbours 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 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.”

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

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

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.

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. – AP

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