Asian countries consider cartel to curb spiralling cost of rice

ASIAN countries are developing plans to tame the spiralling rice market, with Thailand proposing an Opec-style cartel for exporters and the Philippines shoring up supplies while aiming to end its status as the world's largest importer.

The moves come as prices for rice and other food staples rise rapidly around the world, sparking violent protests in Haiti and Egypt along with concerns of unrest elsewhere amid profiteering and hoarding.

The sudden crisis – the price of rice has more than tripled since January – has experts calling for major changes in food production to improve crop yields and cut waste.

"The world has come together in the past," said Robert Zeigler, director general of the International Rice Research Institute in Los Banos, Philippines. "They could come together again to make sure that humanity has enough to eat. We just need the political will."

Zeigler's comments came as Philippine President Gloria Macapagal-Arroyo visited the institute, underscoring the need to show a grumbling public that the government was doing something to deal with the rice prices and stocks.

Thailand, the world's biggest rice exporter, says it wants to form a cartel like Opec (Organisation of the Petroleum Exporting Companies) with Laos, Burma, Cambodia and Vietnam to give them more control over international rice prices.

"Though we are the food centre of the world, we have had little influence on the price," Thai government spokesman Vichienchot Sukchokrat said. "With the oil price rising so much, we import expensive oil but sell rice very cheaply, and that's unfair to us and hurts our trade balance."

Laos foreign ministry spokesman Yong Chanthalansy said his country would "seriously consider" the idea, saying a cartel would give the five countries "bargaining power". Cambodia also welcomed the cartel idea as necessary.

The run-up in rice prices has come amid global food inflation, poor weather in some rice-producing nations and demand that has outstripped supply. Some Asian countries, including India and Vietnam, have contributed to the problem by curbing rice exports to guarantee their own supplies.

But Zeigler said it would be difficult to apply the Opec model to rice. "Rice is grown by millions of farmers in one, two, three acres of land," he said. "Oil is produced by a few multinational companies in a few countries. So the differences are so large as to make any comparison between the two wild fantasies."

He said he would prefer to see a world buffer stock.