Thailand Drops Rice Cartel Proposal
13 May 2008 Thailand’s Foreign Affairs Ministry has dropped the idea of forming a rice exporting cartel with Myanmar, Cambodia, and Vietnam, just a week after the Thai Prime Minister raised the idea, according to the US Dept. of Agriculture’s Foreign Agriculture Service (USDA-FAS).
On April 30, the Thai Prime Minister suggested the formation of the Organization of Rice Exporting Countries (OREC), which was an extension of the long-circulating idea to improve control over rice trade. However, on May 6, the Thai Foreign Affairs Ministry dropped the OREC proposal amid strong international concerns, particularly from the Philippines and international organizations like the Asian Development Bank (ADB), which argued that such a cartel could push global food prices higher.
Instead, Thailand has proposed reestablishing the Council on Rice Trade Cooperation (CRTC). The objective of the CRTC is to strengthen cooperation among major rice producers and exporters in technology transfer to increase overall rice productivity. Also, the CRTC will act as a forum for major rice exporting countries to exchange information on international rice trade.
The idea of CRTC was initiated in 2002 when Thailand and other leading Asian rice exporting nations including Vietnam, India, China, and Pakistan agreed to establish cooperation to stabilize world rice export prices. However, over the past five years, CRTC has failed to make progress in developing this cooperation. Only Vietnam and Thailand have actively shared information and technology exchanges. However, Thai and Vietnamese governments and private officials have generated only low quality information through their meetings, since the Thai and Vietnamese rice sectors are highly competitive.
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