OPEC-style rice cartel up
5 nations led by Thailand agree to fix prices
Philippine Daily Inquirer
First Posted 01:24:00 05/01/2008
Filed Under: rice problem, International (Foreign)Trade, Food, Agriculture
BANGKOK—The countries of Burma (Myanmar), Cambodia, Laos, Thailand and Vietnam have agreed in principle to form a rice price-fixing cartel similar to the Organization of Petroleum Exporting Countries (OPEC) as costs of the staple grain rocket, Thailand’s prime minister said on Wednesday.
Thailand’s Premier Samak Sundaravej said the grouping of Mekong nations would be called the Organization of Rice Exporting Countries (OREC).
“I have talked with Burma and invited them to join the rice exporting countries cartel, which will include Vietnam, Laos and Cambodia, to fix the price,” Samak told reporters.
He said Burma’s Prime Minister Gen. Thein Sein, in Thailand for an official visit, had agreed to join, even though the military-ruled nation was not currently a large rice exporter.
“Thailand will help them in terms of technical support to improve their production for export,” Samak said.
Samak said Vietnam, Laos and Cambodia had also agreed to join, and Thai Foreign Minister Noppadon Pattama said OREC should begin meeting soon.
Thailand is the world’s largest rice exporter. It shipped an estimated 9.5 million tons of rice overseas last year.
World rice prices have soared this year, a trend blamed on higher energy and fertilizer costs, greater global demand, droughts, the loss of rice farmland to biofuel plantations, and price speculation.
International demand for Thai rice has soared after other top exporters Vietnam and India imposed limits on exports to ensure domestic supply.
Thailand has repeatedly insisted it will not limit exports, but on Tuesday the government announced it was releasing its stockpile of 2.1 million tons into the domestic market to keep prices stable.
Crisis is opportunity for farmers
The benchmark Thai variety, Pathumthani fragrant rice, was priced last Wednesday at $998 per ton for export, up from $512 a ton in January this year, the Thai Rice Exporters Association said in a price survey.
Cambodian Prime Minister Hun Sen on Wednesday appealed to the country’s farmers to start growing rice and other crops, saying most of the population would benefit from the global food crisis.
“The food crisis in the world, instead, offers an opportunity for Cambodian farmers although citizens complain about the soaring price of rice,” Hun Sen said during a ceremony some 50 km north of Phnom Penh.
“But in return, some 80 percent (of the population) who are farmers benefit from this. Now the opportunity for our Cambodian farmers has arrived,” he said.
Hun Sen said rain had fallen over most of the country and appealed to farmers to rush to grow a variety of food crops, including rice.
“Now the rainy season has started,” he said. “Now the world has a big crisis, so please, our farmers start growing the crops, including rice, corn and beans. All the crops have a market now,” the premier said.
Hun Sen banned rice exports in late March in a bid to halt soaring prices for the staple food.
But on Wednesday, Hun Sen said that the government was considering exporting rice to find markets for Cambodian farmers and to “fulfill our international obligation in helping other countries ... to reduce the difficulty in the world.”
“Cambodia is a small country, but it can help hundreds of thousands of families if we can export the rice,” Hun Sen said.
“We cannot survive alone,” he said, urging governments to find ways to ensure “the world has food security.”
Officials have said that Cambodia has enough rice with more than 2 million tons stockpiled.
Drop export restrictions
UN Secretary General Ban Ki-moon on Tuesday urged countries to drop export restrictions and said the immediate priority must be to “feed the hungry” as he ordered a task force to tackle the global crisis.
Soaring rice prices have forced the UN World Food Program to indefinitely suspend a program supplying free breakfasts to 450,000 poor Cambodian schoolchildren.
Better quality rice now sells for more than $700 per ton in Cambodia compared with $300-$400 last year, according to sellers.
Cambodia, where more than 30 percent of the population of 14 million lives in poverty, is one of 12 “hunger hot spot” countries, according to the 2006 Global Hunger Index of the International Food Policy Research Institute.
Agence France-Presse
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