The New York Times (pg. C10)  [Printer-friendly version]
May 1, 2008

5 ASIAN NATIONS ARE WEIGHING A RICE CARTEL

By Thomas Fuller

DATELINE: BANGKOK

The prime minister of Thailand, Samak Sundaravej, said Wednesday that
his government would try to create a cartel of rice-producing
countries in partnership with Vietnam, Cambodia, Myanmar and Laos.

"We don't aspire to be like OPEC, but we hope to be just a group of
five to help each other in trading rice on the world market," Mr.
Samak was quoted as saying in The Nation newspaper.

Governments in Thailand, the world's largest rice exporter, have for
many years toyed with the idea of using their dominant market position
to influence the price of rice in the same way that the Organization
of the Petroleum Exporting Countries tries to set crude oil prices.

The plan appears to be in a nascent stage. "I think it's time to do
it, probably within the term of this administration," Noppadon
Pattama, Thailand's foreign minister, said Wednesday.

But if successful, a cartel could have far-reaching consequences on
the rice market, sustaining prices at their current historic highs and
worsening a food crisis that is hurting Asia's poorest consumers. The
price of Thai B-grade rice, a benchmark variety, has nearly tripled in
recent months and is now hovering at about $1,000 a ton.

Maintaining rice prices would please large-scale rice farmers and
traders in countries like Thailand and Vietnam, but it would anger
places like the Philippines, Singapore and Hong Kong, which rely
heavily on imported rice. Plans for the cartel were front-page news in
the Philippines on Thursday.

The current ruling coalition in Thailand received the backbone of its
support from rural areas, and Mr. Samak appears eager to capitalize on
the rice price increase. Thai rice farmers now "have an
opportunity," he said in a recent interview.

Unlike corn, wheat and other grains that are widely traded globally,
only a small number of countries export rice. The largest rice
producers, China, India and Indonesia, consume most of their rice crop
domestically.

Thanks to a vast, fertile delta, which allows farmers to harvest three
or four times a year, Thailand exports about 10 million tons annually,
twice as much as Vietnam, the second-largest rice exporter, and three
times what the United States exports.

Rice prices rose sharply in March and April after many exporting
countries, including Brazil, Egypt, India and Vietnam, announced that
they were restricting exports to ensure domestic supplies.