Thailand calls for a rice cartel

Thailand is the world's biggest rice exporter

Thailand wants to form an Opec-style rice cartel to give it more control over international rice prices.

The world's biggest rice exporter plans to talk to Laos, Burma, Cambodia and Vietnam about co-operating on prices.

Rice prices have tripled so far this year with countries such as India and Vietnam restricting their exports.

A Thai government spokesman confirmed that the cartel idea had been discussed in talks between the prime ministers of Thailand and Burma on Wednesday.

Export cuts

"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," spokesman Vichienchot Sukchokrat said.

Cambodia has supported the idea of a cartel in the past and the government of Laos has also said it would seriously consider the proposal.

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

It's not a good idea, it's a bad idea. It will create an oligopoly and it's against humanity Edgardo Angara, Philippines senate committee on agriculture

But the proposal has met with opposition from other quarters.

Vietnam's government disputed claims that a cartel was close, telling the Bangkok Post that Thai negotiators scheduled to visit Vietnam to discuss the issue last month had not turned up.

Vietnam announced in March that it would cut its exports by 22% this year, although it said that was to make sure there was enough for domestic consumption rather than to manipulate prices.

The Philippines, the world's biggest importer of rice, also raised objections.

"Almost three billion people are rice eaters," said Edgardo Angara, chairman of its senate committee on agriculture.

"It's not a good idea, it's a bad idea. It will create an oligopoly and it's against humanity."

'Not like oil'

The president of Thailand's own Rice Exporters Association also criticised the idea.

"When there is a crisis with rice, they [the government] talk about this cartel," Chookiat Ophaswongse said.

"You cannot control farmers growing or not growing rice. It's not like oil."

The United Nations World Food Programme has described rising food prices as a "silent tsunami" hitting poor countries.

Poor harvests, rising demand from growing populations as well as hoarding on the expectation of further price rises have all been blamed for soaring prices.

The price of regional benchmark Thai grade B rice rose above $1000 a tonne for the first time last month, up from $383 in January.

The idea of a south-east Asian rice cartel has cropped up periodically for several years but political differences have so far prevented its creation.