Mekong nations to form OPEC-style rice cartel -Thai PM
02-MAY-2008 Intellasia | Thomson Financial
May 2, 2008 - 7:00:00 AM
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Thailand has agreed in principle to form a rice price-fixing cartel with Burma, Laos, Vietnam and Cambodia as costs of the staple grain surge, prime minister Samak Sundaravej said on Wednesday April 30.
The grouping of Mekong nations would be similar to the oil cartel OPEC, and would be called the Organisation 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.
Burma's prime minister general Thein Sein, in Thailand for an official visit, has agreed to join the group, even through the military-ruled nation is not currently a large rice exporter, he said.
'Thailand will help them in terms of technical support to improve their production for export,' Samak said.
Vietnam, Laos and Cambodia have also agreed to join, and Thai Foreign minister Noppadon Pattama said OREC should begin meeting soon.
Thailand is the world's largest rice exporter, shipping an estimated 9.5 million tonnes of rice overseas last year.
World rice prices have soared this year, a trend blamed on higher energy and fertiliser 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 tonnes into the domestic market to keep prices stable.
The benchmark Thai variety, Pathumthani fragrant rice, was priced last Wednesday April 30 at US$998 per tonne for export, up from US$512 a tonne in January this year, the Thai Rice Exporters Association said in a price survey.
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