Thailand ditches plan for rice cartel

It instead proposes regional meeting to address issues of productivity and data-sharing
Straits Times 7 May 08;

BANGKOK - THAILAND is dropping its plan to create a South-east Asian rice cartel aimed at fixing the skyrocketing price of the commodity.

The proposal to create an Opec-style cartel was first floated last week by Prime Minister Samak Sundaravej to give rice producers greater control over prices, which have tripled since last December.

But the idea was heavily criticised by senators in the Philippines, a major importer, as well as some Thai rice exporters.

'We are not talking about setting up a rice cartel,' Foreign Minister Noppadon Pattama said yesterday, after meeting ambassadors from Cambodia, Laos, Myanmar and Vietnam. He said such a move would worsen food security.

Mr Noppadon said Thailand was, instead, proposing a meeting on rice within the next month or two, with the aim of improving productivity and sharing information.

He denied that the about-face on the cartel had anything to do with concerns about its impact on the Philippines.

'We are sympathetic to all human beings, not just the Filipinos,' he said.

Meanwhile, Malaysia will almost double domestic rice distribution from today after demand surged for home-grown supplies which are subsidised by the state.

The government told the sole licensed rice supplier, Padiberas Nasional, to raise monthly distribution of price-controlled rice to 20,000 tonnes from 11,000.

Agriculture Minister Mustapa Mohamed said more Malaysians were switching to so-called broken rice, a variety that includes smashed grains. He also urged Malaysians not to hoard as there are sufficient stockpiles.

Asean secretary-general Surin Pitsuwan said the grouping had a rice stockpile ready for distribution to its members during emergencies.

Dr Surin, who was in Singapore to launch the Centre for Non-Traditional Security Studies set up by the S. Rajaratnam School of International Studies, said details on how and when to distribute the supplies were being worked out.

In his view, there is no food shortage in the region, despite soaring rice prices and fears of a shortfall in rice-importing countries such as the Philippines. The key problems now are the management of food supplies and the external pressures on prices, he said.

ASSOCIATED PRESS, BLOOMBERG

ADDITIONAL REPORTING BY KOR KIAN BENG