Rice prices overshadow Asean trade ministers' meeting

Business Times 3 May 08;

(NUSA DUA, Indonesia) South-east Asian trade ministers met yesterday for talks on how to respond to soaring rice prices, after US President George W Bush proposed US$770 million in new US food aid to stave off a global food crisis.

The weekend gathering of the 10-member Association of Southeast Asian Nations (Asean) on the resort island of Bali, famed for its shimmering green rice terraces, also discussed efforts to build momentum for long-delayed world trade talks.

'Our minister will talk about the rice price. We share the general concern,' said an official from the Philippines, which is the world's top rice importer, buying about 10 per cent of its annual needs from overseas.

Asian rice prices have almost trebled this year and prices on the Chicago Board of Trade have risen more than 80 per cent.

Mr Bush, expressing concern as rocketing world food prices intensified unrest in poor countries, promised on Thursday that the US would take the lead as hunger takes hold of a greater swathe of the developing world.

'With the new international funding I'm announcing . . . we're sending a clear message to the world that America will lead the fight against hunger for years to come,' Mr Bush said.

The World Food Programme issued an emergency appeal in late February for an extra US$500 million to help feed 73 million hungry people in 80 countries. Last month, a spokeswoman said that soaring rice prices has pushed the emergency appeal to US$756 million.

At the Bali talks, which conclude tomorrow and also involved representatives from Australia, New Zealand, India and the US, Malaysian Trade Minister Muhyiddin Yassin said that he would press for the 'hot topic' of food security to be higher on the agenda.

'It is about how Asean countries could cooperate to use their resources,' he told reporters, adding that Malaysia intended to raise its food production to reduce imports but that it could take his nation 10 years to be self sufficient in rice.

The world's biggest rice exporter, Thailand, is also at the Bali meeting of Asean economic ministers and an official from its delegation said that the seller's perspective should also be heard.

'The cost for producers, such as fertiliser, is going up. Everything is going up,' said the official.

With only 30 million tonnes traded annually, government export curbs, such as those from India and Vietnam, have spooked importers, such as the Philippines and Bangladesh, at a time when global stocks have halved from a record high in 2001.

Media reports quoted Indian Commerce Minister Kamal Nath, who was also due to attend the meeting, as saying that rice exporters such as India, Thailand and Vietnam had a key role and would support Bangkok convening a 'rice summit', without elaborating.

An Indian official in Bali confirmed that New Delhi had floated the idea, but doubted that it would be brought up at this meeting.

A Thai trade official, who declined to be named, sought to soothe concerns about a further rise in rice prices, reaffirming the country's policy not to curb rice exports.

'Thailand's policy remains the same. We don't have any problem over the supply of rice,' he said. -- Reuters